Latham & Watkins Acted in ADGM's DLT Foundations Regulations

Latham & Watkins Acted in ADGM's DLT Foundations Regulations

The international law firm Latham & Watkins has provided comprehensive legal guidance to the Abu Dhabi Global Market (ADGM), a prominent financial free zone in the United Arab Emirates (UAE), in formulating ground-breaking regulations for Distributed Ledger Technology (DLT) Foundations. This momentous development establishes ADGM as a global leader in the field of digital assets.

Latham & Watkins' insightful legal expertise played a critical role in shaping the DLT Foundations Regulations of ADGM. These regulations are thoughtfully designed to establish a robust and transparent regulatory framework for the creation and operation of DLT-based foundations within the ADGM jurisdiction. They mark a significant stride in ADGM's commitment to embracing innovation and fostering an environment conducive to the growth and adoption of DLT solutions.

Released on November 1, 2023, these regulations introduce a pioneering legislative framework explicitly designed for the establishment and operation of DLT foundations. This framework serves the purpose of utilizing, deploying, developing, facilitating, or supporting DLT technology or the issuance of tokens-a unique initiative on a global scale.

The DLT Foundations Regulations by ADGM offer an extensive framework for DLT foundations. This framework covers well-defined legal structures, transparent registration procedures, stringent governance criteria, and a favourable structure for token issuance.

These regulations were formulated through a comprehensive benchmarking process involving various peer jurisdictions. They also integrated valuable input from DLT stakeholders, as outlined in ADGM's April 2023 consultation paper. The objective is to afford market participants significant governance flexibility within DLT foundations, acknowledging the evolving landscape of decentralisation.

This regulatory adoption is in harmony with ADGM's continuous endeavours to establish itself and promote the UAE on a global scale as a leader in fintech and virtual asset regulation.

The Latham team, under the leadership of Dubai/Riyadh partner Brian Meenagh, London partners Stuart Davis, and Andrew Moyle, included Dubai associate Ksenia Koroleva, Riyadh associate Matthew Rodwell, and London associate Sam Maxson who played pivotal roles in benchmarking and drafting. Additionally, guidance was contributed by New York partner Stephen Wink, Hong Kong associate Zoe Wang, Singapore associate Gen Tan, and San Francisco associate Adam Zuckerman.

“This bespoke regime for DLT foundations, catering to a vast spectrum of blockchain and web3 use cases and decentralized business models, significantly advances the industry, reinforcing ADGM’s position as a leading market for blockchain innovation,” Stuart Davis, Global Co-Chair of Latham’s Digital Assets & Web3 Practice, stated.