ADGM FSRA implements amendments to its Digital Asset Regulatory Framework

On the 10 June 2025, the Financial Services Regulatory Authority (“FSRA”) of the Abu Dhabi Global Market (“ADGM”) announced the implementation of amendments to its regulatory framework for digital assets (the “Digital Asset Updates”). The changes came into force with immediate effect. The implementation of these amendments follows the initial proposal and feedback received on Consultation Paper No. 11 issued by the FSRA in December 2024.

Key Takeaways

• Approved Virtual Assets. Only “Accepted Virtual Assets” can be used by the financial services industry in the ADGM, such as for trading, custody, or investment management. One of the main changes from the recent Digital Asset Updates is how new digital currencies (also called “Virtual Assets”¹As such terms in defined in the Financial Services and Markets Regulations 2015 (“FSMR”).) will be approved for the use in regulated financial services within the ADGM. As part of the updates, the FSRA has moved away from an approval based process to a notification process based on a self-assessment by the applicant that is done by following a robust set of criteria pre-defined by the FSRA. The main legislation has also been updated to introduce an express prohibition for certain Virtual Assets, such as privacy tokens, algorithmic stablecoins or any digital asset employing similar technology, which cannot be used in regulated financial services within ADGM.
• Fees. The FSRA took the opportunity to streamline the calculation of the application and supervision fees applicable to certain regulated activities performed in relation to Virtual Assets (“VA Regulated Activities”) and clarified that such fees will be treated as “add on” fees in addition to the fees otherwise applicable to the relevant regulated activity. A summary of these fees is set out in the table below:
  
  
  
  
• Capital Requirements. Except for an authorised person Operating a Multilateral Trading Facility²Multilateral Trading Facility or MTF means a multilateral system, operated by an ADGM licensed business or a recognised investment exchange, which brings together multiple third-parties buying and selling interests in Virtual Assets, in the system and in accordance with non-discretionary rules, in a way that results in a contract in accordance with its rules. in relation to Virtual Assets³The capital requirements applicable to an authorised person Operating a Multilateral Trading Facility require such an authorised person to hold regulatory capital of: (a) an amount equal to 6 months' operational expenses; plus (b) unless the FSRA directs otherwise, an additional buffer amount of up to a further 6 months' operational expenses. and as noted below, the capital requirements applicable to authorised persons conducting VA Regulated Activities are generally aligned with those applicable to authorised persons conducting the same regulated activity in relation to traditional financial assets.
• Intervention Powers. The FSRA has broad powers under FSMR to supervise authorised persons with respect to the performance of VA Regulated Activities.⁴FSMR section 5A and 5B.For example, the FSRA has powers to require an authorised person to either take such action as the FSRA may specify, or cease the conduct of a regulated activity in respect of a Virtual Asset, for such period of time as the FSRA thinks appropriate.
• Venture Capital. Finally, the amendments expand the scope of investments in which Venture Capital Funds may invest to include Virtual Assets (either directly or through an underlying master fund). Previously, Venture Capital Funds were only permitted to invest in securities of unlisted early-stage companies.

Where can I find the Updates?

The Digital Asset Updates comprising amendments to the FSRA’s Conduct of Business Rulebook, the Fund Rulebook and the Prudential – Investment, Insurance Intermediation and Banking Rulebook can be found here. The Digital Asset Updates also cover updates to the FSRA’s Fees Rules and the enactment of the Financial Services and Markets (Amendment No. 1) Regulations 2025 amending the Financial Services and Markets Regulations 2015 (“FSMR”), which can be found here.

The FSRA has also updated the Guidance – Regulation of Virtual Asset Activities in ADGM to reflect the Digital Asset Updates. The revised guidance can be found here.

Reach out to your usual King & Spalding contact to find out how the Digital Asset Updates will impact your existing business and future plans.