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Virtual asset firm M2 has been granted financial service permission (FSP) to operate a multilateral trading facility and offer custody services from the United Arab Emirates capital by the Financial Service Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM).
The Abu Dhabi Global Market (ADGM) announced on August 16 2023, that the regulatory approval would enable institutional and retail clients within the United Arab Emirates (UEA) to engage in activities related to virtual assets. These activities include buying, selling and maintaining custody of virtual assets such as Bitcoin (BTC) and Ethereum (ETH).
Overview of M2
Over the past year, M2 has been developed with a long-term vision to establish trust, security and integrity in the emerging virtual asset class. It reflects a commitment to providing a reliable and reputable platform for users.
CEO of M2, Stefan Kimmel, said: “The process of obtaining the licence is the first step on our journey and we will remain in close dialogue with ADGM to ensure transparency around the custody of the client’s assets.” Kimmel added that the ADGM regulatory framework has established clear rules for those operating in the virtual assets sector and M2 will uphold the highest standards to reflect their vision.
The M2 platform is scheduled to launch later in 2023, subject to regulatory approvals. Once live, the M2 platform intends to increase the product offering of the number of assets and services offered to include derivatives along with market-leading yield services.
Experts from Bitcoineer mentioned that in 2018, ADGM introduced a comprehensive virtual asset regulatory framework to manage and control virtual assets like cryptocurrencies. It attracted several major companies that deal with cryptocurrencies to set up businesses because they could now operate within a well-regulated financial and economic area. In a statement, the Chief Executive Officer of ADGM Authority, Salem Al Darei, said, “At ADGM, our mission has always been centred on unlocking new growth opportunities and fostering investments in the virtual asset sector.”
Detail about M2 Exchange
M2 Exchange is an Abu Dhabi-based crypto exchange allowing UAE-based institutions and clients to buy, sell and manage custody digital assets. The M2 platform will launch soon with institutional-grade trading features, on and off-ramp for fiat payments. According to their social media page, M2 will be a best-in-class trading and investment platform to grow one’s wealth in the digital asset space.
Cryptocurrency Timeline in the UAE
On November 16 2022, the world’s biggest crypto exchange, Binance, received FSP from the ADGM. This move was the latest in regulatory approvals for Binance in the Middle East. Binance was cleared to offer crypto custodial services to professional clients once it met the requirements for its FSP. This comes after Binance was granted in-principle approval in April 2022. This move made Binance the third exchange to receive regulatory approval in the Middle Eastern region after Dubai and Bahrain.
The on-principle permission enabled Binance to function as a broker-dealer in digital assets, in addition to cryptocurrencies marking another milestone for the exchange, which envisions operating as a fully licensed firm. ADGM stated:
“The IPA is part of Binance’s plans in establishing itself as a fully-regulated virtual asset service provider in an internationally recognised and well-regulated financial centre.”
The move was welcomed by the CEO of ADGM, Dhaher bin Dhaher who also promised to assist Binance’s efforts to establish its presence in Abu Dhabi. On March 22 2022, ADGM published a consultation paper which proposed that ADGM-licensed companies would be allowed to facilitate non-fungible token (NFT) trading in the country.
In July 2023, Rain, a crypto exchange, received similar regulatory permission to offer UAE residents virtual asset brokerage and custody services. The approval would enable certain UAE-based institutional and retail users to buy, sell, trade and store virtual assets via the platform. On its website, Rain mentioned that it primarily focused on offering crypto services across the Middle East and Turkey, with its headquarters in Bahrain. Rain became the first licensed virtual assets service provider in the Middle East in 2019 and is regulated by the Central Bank of Bahrain.
M2 has been granted the green light to allow regular people and big organisations in the UAE to sell, buy and store virtual assets. While the platform enables UAE users to purchase crypto using fiat money, it could bridge the gap between traditional financial systems and cryptocurrencies.
