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The U.A.E.’s SCA Launches Fintech Controls Targeting Cryptocurrencies

U.A.E | Cryptocurrency regulations | Fintech

U.A.E.’s market regulator has been quite vocal about there distaste for a while now. In fact earlier this year, they issued a warning to investors about initial coin offerings, or ICOs, a new form of crowdfunding underpinned by cryptocurrencies in the largely unregulated fintech industry. However, the situation is about to tilt towards crypto now as the U.A.E.’s Securities and Commodities Authority (SCA) has approved regulations for fintech.

The SCA approval entails that cryptocurrencies will now be treated as securities and controls for trading digital tokens will be introduced soon. Fintech covers a broad range of innovations in the financial services industry including Cryptocurrencies. Crypto has been under scrutiny due to its volatility and the emergence of ICOs. Now that, U.A.E government has decided to take a closer look at fintech, the digital assets come in the package.

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According to a statement announcing the resolution, the SCA has developed a plan to regulate digital securities and commodities. A few details for the same were provided in the statement: 

“In light of the rapid development of the digital tokens market and the response thereto by the regulators in a number of countries worldwide towards regulating the initial coin offerings (ICOs), the SCA Board of Directors has approved the SCA plan to regulate the ICOs and recognize them as securities,” 

The move is not an isolated step, in June, the Abu Dhabi Global Market launched a framework to regulate spot crypto asset activities, including those undertaken by exchanges, custodians and other intermediaries within its jurisdiction.

U.A.E regulators stand on a tight spot in regards to cryptocurrency. On one hand, there is distrust, while on the other cryptocurrency sales from successful ICOs totaled $13.7 billion in the first five months of 2018. According to a recent report from consulting firm Strategy& and Switzerland-based Crypto Valley Association, the report tallied 537 ICOs so far in 2018 after last year saw 552 ICOs raise a total of $7 billion. 

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