ADGM Reinforces Digital Asset Oversight with June 2025 Amendments: Expert Insights
In a strategic move to enhance investor protection and market stability, the Abu Dhabi Global Market (ADGM) has implemented sweeping amendments to its Virtual Asset Regulatory Framework, effective June 10, 2025. These reforms, following Consultation Paper No. 11 of 2024, reflect ADGM’s alignment with international best practices and its growing reputation as a regulated hub for digital asset innovation.
The analysis below is based on a comprehensive summary shared with Unlock Blockchain by Rasma Legal, a premier law firm based in the UAE.
Transformation of the Accepted Virtual Asset Process
Among the most notable changes is the transformation of how Accepted Virtual Assets (AVAs) are approved. Instead of direct FSRA approval, regulated firms are now required to assess each virtual asset using FSRA-defined criteria, including traceability, security resilience, exchange connectivity, and market relevance. A formal pre-notification must be submitted to the FSRA five business days before launch. Firms must also publish a detailed list of supported AVAs on their websites to enhance transparency and public accountability.
Ban on Privacy Tokens and Algorithmic Stablecoins
The FSRA has introduced a clear ban on the use, custody, issuance, or trading of privacy tokens and algorithmic stablecoins within ADGM. Privacy tokens are prohibited due to AML concerns, while algorithmic stablecoins are barred for their speculative and unstable design. As highlighted by Rasma Legal, these prohibitions bring ADGM into closer alignment with jurisdictions such as the EU and Singapore, further emphasizing the FSRA’s focus on transparency and financial integrity.
Enhanced Capital Requirements
To reinforce operational resilience, capital requirements for regulated firms have been significantly raised. According to Rasma Legal’s summary, virtual asset custodians must now maintain the higher of USD 250,000 or six months of annual audited expenditure. MTF operators dealing with virtual assets must hold similar capital buffers, with the FSRA introducing new minimum floors and buffer requirements under the Prudential Rulebook (PRU).
FSMR Updates on Virtual Assets and Commodities
Amendments to the Financial Services and Markets Regulations (FSMR) grant the FSRA broader authority to define criteria for AVAs and Accepted Spot Commodities. It may also issue directions to restrict or prohibit virtual asset or fiat-referenced token activities if deemed contrary to regulations or market interests.
Rasma Legal notes that updated definitions now distinguish virtual assets from specified investments, fiat-referenced tokens, and commodities. MTFs are officially recognized as platforms for virtual asset trading.
Streamlined Fee Framework
The FSRA has overhauled its fee structure, replacing the per-activity model with a consolidated approach. Regulated firms now pay a single fee for all activities—$20,000 unless operating an MTF, in which case the fee is $125,000. Annual supervision fees follow a similar model. This change is expected to reduce administrative burden and provide greater cost predictability, particularly for multi-activity firms.
Broader Investment Scope for Venture Capital Funds
In a move welcomed by digital finance stakeholders, the FSRA has revised its FUNDS Rulebook, allowing Venture Capital Funds (VCFs) to invest in a wider range of virtual assets, including governance tokens, utility tokens, and digital rights. These investments must be linked to early-stage companies. As Rasma Legal points out, the amendments also recognize master–feeder structures, facilitating offshore capital onboarding and structural flexibility.
Tighter Governance and Custody Oversight
Under updates to Chapter 17 of the Conduct of Business Rulebook (COBS), the FSRA has set stricter governance obligations for firms engaging in virtual asset activities. Firms must conduct thorough AVA assessments, pre-notify the regulator, and ensure proper custodian due diligence based on specific rulebook criteria. These measures aim to improve client asset protection and market transparency.
The June 2025 amendments mark a pivotal evolution in ADGM’s digital asset regulatory regime. By introducing clearer asset classification rules, enhanced capital buffers, a more efficient fee framework, and tighter due diligence standards, the FSRA is reinforcing its commitment to risk-based innovation and global compliance.
