The Dubai Financial Services Authority (DFSA) announced on Monday key enhancements to its crypto token framework. These amendments come following the ‘Consultation Paper 153 – Updates to the Crypto Token’ regime proposal of January 2024. The amendments mark a significant step forward 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 the ability to offer units of external and foreign funds investing in recognized crypto tokens. Moreover, they have enhanced the ability for domestic qualified investor funds to invest in unrecognized crypto tokens, custody of crypto tokens, and staking of crypto tokens.
Moreover, they address financial crimes through anti-financial crime compliance guidelines. This includes the ‘travel rule’ transaction monitoring and blockchain analysis. In addition, they include the recognition of crypto tokens and the fees for recognizing crypto tokens.
DFSA made the amendments due to the recent market developments, recommendations from international standard-setters, and its supervisory experience.
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“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.
During the last two years, DFSA has engaged with over 100 firms looking to be licensed, gaining valuable insights into the 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.
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