The securities and commodities regulator in the United Arab Emirates has approved a plan to adopt comprehensive regulations for crowdfunding through ICOs and recognize tokens as securities. The decision comes after a review of best practices in other countries and signals a change in its position regarding initial coin offerings. Earlier this year investors were warned about the risks associated with tokens sales.
UAE to Regulate Coin Offerings, Recognize Tokens as Securities
UAE Securities and Commodities Authority (SCA) has approved a plan to regulate initial coin offerings (ICOs) in the country and recognize the issued tokens as securities, its Chairman Sultan bin Saeed Al Mansouri said this weekend, Arabian News reported. Mansouri is also the Minister of Economy of the United Arab Emirates.
The important resolution of the SCA Board of Directors follows the review of a study covering best practices in the field applied around the world. The adopted plan includes a whole set of mechanisms and is part of an integrated project to regulate digital securities and commodities, the SCA’s chief explained, quoted by WAM news agency. It will be set in motion a day after the publication of the decision in the country’s official journal.
The latest move by the securities regulator indicates a positive change in its attitude towards the fintech industry. The watchdog stated that it is part of a number of initiatives aimed at upgrading the financial activities and services in the securities sector in the UAE in order to match the best international standards and practices.
Investors at Their Own Risk, Regulator Warns of Price Volatility
Earlier this year, the SCA called upon investors to exert caution towards token-based fundraising activities and other crowdfunding schemes. In a statement released this past February, the authority noted that the terms and features are specific for each coin offering. The same, according to the regulator, applies to the rights acquired by those who fund the projects.
The SCA also stressed that ICOs are speculative, warning that the prices of the tokens may be highly volatile. It told investors that their involvement in this type of crowdfunding is at their own risk. The watchdog also urged organizers of initial coin offerings to seek legal and regulatory advice to ensure the compliance of their projects with applicable laws and regulations in the United Arab Emirates.
What are your expectations for the future of cryptocurrencies and crowdfunding in UAE? Share your thoughts on the subject in the comments section below.
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Source : Bitcoin