ADGM specifies commercial licensing rules for crypto miners

The Abu Dhabi Global Market (ADGM) has introduced new licensing rules specifically for commercial cryptocurrency mining operations within or from its jurisdiction. The guidance, published on Wednesday, marks the first comprehensive document of its kind issued by a regional international financial centre. It categorises crypto mining as a licensable commercial activity, distinct from financial services regulated by ADGM’s Financial Services Regulatory Authority (FSRA).

The document establishes a dedicated commercial licence under business activity code 7230, requiring operators to assess their proposed activities before applying, particularly where business models could involve financial services needing separate regulatory permission. This distinction aims to clarify supervisory authority and avoid mistaken registration for regulated financial activities.

The guidance is technology-neutral, covering various blockchain consensus mechanisms like proof-of-work mining and proof-of-stake validation. Corporate governance and transparency are emphasized, with operators required to disclose information about corporate structures, ultimate beneficial owners, and blockchain addresses associated with mining rewards.

Supervision is proportionate to business scale and risk profile, with ADGM's oversight taking individual operational differences into account. Rashed Al Blooshi, chief executive of ADGM’s Registration Authority, highlighted the guidance as providing operators with a clear commercial licensing pathway and greater regulatory certainty.

The approach is expected to apply to ADGM-registered headquarters managing mining activities outside the jurisdiction, ensuring appropriate governance remains in place. The guidance is the first phase of ADGM’s approach to crypto mining, with plans for further regulatory development and consultation before finalising the next stage.