The Dubai Financial Services Authority (DFSA) announced significant enhancements to its crypto token framework on Monday. These updates follow the “Consultation Paper 153 – Updates to the Crypto Token” regime proposal from January 2024. These amendments represent a crucial step in advancing the regulatory environment for crypto tokens at the Dubai International Financial Center (DIFC).
The new amendments to the DFSA’s crypto token framework address several key areas. First, they allow the offering of units of external and foreign funds investing in recognized crypto tokens. Additionally, they enhance the ability for domestic qualified investor funds to invest in unrecognized crypto tokens. The amendments also cover the custody and staking of crypto tokens.
Furthermore, the enhancements tackle financial crimes through comprehensive anti-financial crime compliance guidelines. These guidelines include the ‘travel rule’ for transaction monitoring and blockchain analysis. They also cover the recognition of crypto tokens and the fees associated with this recognition.
DFSA made these amendments in response to recent market developments, recommendations from international standard-setters, and its own supervisory experience.
“Our objective with the crypto token regime is to foster innovation in a responsible and transparent manner while ensuring we meet our regulatory objectives,” stated Ian Johnston, chief executive of the DFSA.
Over the last two years, DFSA has engaged with over 100 firms seeking licenses, gaining valuable insights into market dynamics and regulatory needs. “At the DFSA, we have taken a balanced approach in developing this regime and remain committed to evolving it in line with global best practices and standards,” added Johnston.
These enhancements aim to create a robust and secure environment for crypto investments, positioning Dubai as a leader in the global crypto market.
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