UAE approves regulations on ICO

Sep 24, 2018 at 19:45

The Securities and Commodities Authority (SCA) of the United Arab Emirates (UAE) said its board has approved a plan to regulate initial coin offerings and recognize them as securities.

“The Board of Directors, having reviewed a study on the best international practices in this regard, issued a directive that the procedures for trading digital token are to be regulated. The plan developed by the SCA includes a set of mechanisms as part of an integrated project to regulate digital securities and commodities,” the regulator’s statement read.

The rules to be crafted would put under scrutiny the entities who will issue the digital tokens and the blockchain operators, among other elements of an ICO. The SCA is also looking at placing a requirement on the nature and number of information to be provided in the prospectus or whitepaper of the project to be funded.

The rules on the regulation of listing and trading of such securities, smart contracts, the opening and registration of an e-Wallet on Blockchain will also be reconciled with money-laundering requirements.

In May this year, it may be recalled that the SCA issued a statement cautioning investors of the risks accompanied in being involved in ICO-focused businesses.

However, seeing the rapid development of the digital tokens market, the SCA deemed it fit to follow other countries’ move to place regulations on the indomitable rise of ICOs.

“It was emphasized that SCA should raise the awareness of investors on digital securities and commodities, with focus on the need that the SCA should adopt the best international practices in handling this new subject and consult with the industry and the markets, locally and internationally, towards its regulation,” the SCA added.