HomeAltcoin NewsUAE Securities and Commodities Authority to Regulate ICO Tokens as Securities

UAE Securities and Commodities Authority to Regulate ICO Tokens as Securities


The regulation of initial coin offerings remains an ongoing topic of debate. Various countries are tackling this industry from different angles. The UAE market regulator seeks to introduce more legitimacy for cryptocurrencies and digital tokens. A positive development overall, especially given the warnings issued earlier.

Initial Coin Offerings in the UAE

Similar to other countries, the UAE has kept close tabs on the ICO industry. Companies raising money without regulation or oversight is a thorn in the side of policymakers. Earlier this year, the country’s market regulator issued a strong warning to investors about initial coin offerings. No ban has been introduced, nor will there be for the foreseeable future.

Ever since, not much has changed in this part of the world. For the market regulator, the work had only just begun. Numerous months are spent working on a regulatory draft to introduce more legitimacy for both cryptocurrencies and digital tokens. Under the new guidelines, cryptocurrencies will be treated as securities. Trading of digital tokens is allowed, yet under strict guidelines to protect consumers and investors.

Few details regarding this proposal are made public at this time. Local sources indicate the SCA will introduce mechanisms to regulate digital securities and commodities. It is part of the growing focus on the fintech industry within the UAE. Other Gulf countries are taking similar strides when it comes to financial technology and innovation. This seems to indicate more regulatory efforts can be expected in the near future.

Legitimizing Cryptocurrencies is a Positive Sign

The UAE has been at the forefront of tackling the cryptocurrency industry. In June, a framework was introduced to regulate spot crypto asset activities. At that time, the community was taken aback by this new development. Several months earlier, the Dubai Financial Services Authority warned about investing in cryptocurrencies.

This is another sign of how countries are not eager to ban cryptocurrency activity. Instead, policymakers attempt to bring legitimacy to these new assets in many different ways. Applying existing guidelines to Bitcoin and other assets is very difficult, if not impossible. Regulators in the UAE acknowledge a new framework is needed. By treating cryptocurrencies as securities, an important first step is taking

How other countries will treat Bitcoin and altcoins, remains rather unclear. A few regions inch closer to introducing their regulatory guidelines for this booming industry. India’s Supreme Court will render its verdict this week. The SEC continues to make contradicting decisions regarding trading vehicles pertaining to cryptocurrencies. A lot of crucial decisions have yet to be made in this regard. For now, no further bans appear imminent, albeit anything is possible in this industry.

How will the new UAE regulatory guidelines affect the cryptocurrency and ICO markets? Let us know in the comments below.

Images courtesy of Shutterstock


JP Buntinx
JP Buntinx
JP is a freelance copywriter and SEO writer who is passionate about various topics. The majority of his work focuses on Bitcoin, blockchain, and financial technology. He is contributing to major news sites all over the world, including NewsBTC, The Merkle, Samsung Insights, and TransferGo.

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