There seems to be a cryptocurrency regulatory turn-around in the UAE, Arabian Business reports. The publication quotes the SCA Chairman who is also Minister of Economy Sultan bin Saeed Al Mansouri to that effect.
Back in March of this year, the UAE’s Securities and Commodities Authority (SCA) issued a public warning against ICOs. In the statement, the SCA cited differing “terms and features” of individual initial coin offerings (ICOs). The statement also noted the changing nature of the rights of interest “that is acquired by the investor.” Further, the SCA believed the ICOs to be too speculative for its citizens. The authority did not hesitate to call out the volatility of cryptocurrency prices as another cause for alarm.
Fraud prone and risky
In the directives that came in the statement, the authority discouraged participation in ICOs saying: “Some of the ICOs are not regulated and may be subject to risk or fraud.” Further, the authority noted that, “The ICO may not be operating within UAE and be subject to foreign laws and regulations which can not only be difficult to verify. Further following the money in the event of a collapse of the ICO as well as recovering invested funds may prove extremely difficult in practice.”
Therefore, it comes as a relief to see the SCA finally accept the cryptocurrencies as securities. According to the Minister, the authority cane to the decision after going over “a study on best international practices.” The study elaborated the underlying concept of the ICOs and whether they pose any danger to national economies.
New regulations to facilitate cryptocurrency regulatory turn-around
According to WAM News Agency, a local news outlet, the decision is a unanimous resolution at Ministry level. The agency details that the decision becomes official soon after publication. Per the news outlet, the SCA regards the status of ICOs as safe securities since its market is “rapidly developing.”
In addition, as part of the cryptocurrency regulatory turn-around, the SCA is overhauling the Securities Brokerage Regulations. Mondovsione.com reports that the SCA issued “Decision No. (27) Of 2018 amending Decision No. (27) Of 2014.” In the new regulations, “paid-up capital for trading and clearing members shall not fall below AED 30 million and that the bank guarantee provided shall not be less than AED 20 million.”