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DLT Foundations Framework
World’s First Framework for Blockchain Foundations, DAOs, and Web3 Entities
Designed in partnership with leading industry experts, this groundbreaking framework establishes a worldwide standard, providing a robust legal structure tailored for Blockchain Foundations, DAOs, and Web3 Entities. Embedded within the framework of English Common Law, ADGM’s regulatory environment promotes a thriving ecosystem for digital assets recognized globally.
The framework excels in integrating Virtual Assets, facilitating the issuance of tokens and supporting diverse token governance strategies. It allows for innovative governance models through token voting and smart contracts, all while operating without the need for traditional bylaws.
One of its core advantages is the elimination of the physical presence requirement, enabling entities to operate globally without geographical constraints.
Why Choose ADGM DLT Foundations?
Tailored Framework
Created specifically for the DLT and Blockchain industry, addressing unique regulatory and operational requirements.
Decentralisation
Recognition of decentralized governance, allowing community participants to have authority and control while having no physical presence requirements
Regulatory Clarity
Well-defined legal and regulatory guidelines for token issuance, holding, and governance.
Global Precedence
The first-of-its kind regime designed for Blockchain Foundations and DAOs.
Tech-led Governance
Developed in collaboration with industry participants to ensure alignment with the latest developments.
Independent Legal Personality
DLT Foundations as ownerless legal structures that can sue and be sued, operating in accordance with the Objects defined by the Founders.
Straightforward Establishment
Provides a straight-forward process of establishing as a new entity or migrating overseas Foundations to the UAE.
Business-Friendly Ecosystem
Providing access to a vibrant ecosystem with reduced bureaucracy, enabling entities to focus more on core operational activities, thus fostering efficiency and growth.
360° Regulatory Support
Providing comprehensive support for blockchain activities to facilitate a holistic and efficient regulatory ecosystem.
1. How can I register a DLT Foundation?
To register a DLT Foundation, you must engage with one of the Company Service Providers (CSPs) registered in ADGM. The selected CSP will be responsible for submitting an application to register a DLT Foundation to ADGM.
Refer to a list of CSPs in the Resources section.
2. How long does it take to register a DLT Foundation?
Typically, the registration process for a DLT Foundation can be completed within one month. Achieving this timeline effectively depends on the quality of the submission and the promptness of responses to any requests for clarification during the registration process.
3. Can a DLT Foundation issue Tokens?
Yes, a DLT Foundation can issue utility token(s).
4. How can I determine whether a token issued by a DLT Foundation is a utility token or a security token?
The classification of a token as either a utility token or a security token is guided by specific regulations and guidance within ADGM. You can refer to the following documents for detailed criteria
Additionally, you may lean on the following regulations, rulebooks and guidance notes:
- The Financial Services and Markets Regulations 2015 (the “FSMR”);
- Guidance – Regulation of Virtual Asset Activities in ADGM (the “VA Guidance”);
- Guidance – Regulation of Digital Security Offerings and Virtual Assets under the FSMR (“ICO Guidance”);
- Guidance – Regulation of Digital Securities Activity in ADGM (“Digital Securities Guidance”);
5. Are DLT Foundations allowed to conduct commercial or financial activities?
No, a DLT Foundation cannot engage in commercial or financial activities that require a Financial Services Permission.
For detailed guidelines on what constitutes permitted activities for DLT Foundations, please refer to the “Guidance on Permitted Activities for DLT Foundations” available in the Resources section.
6. Can a DLT Foundation have subsidiaries that participate in commercial or financial activities?
A DLT Foundation can establish subsidiaries both within the Abu Dhabi Global Market (ADGM) and in other jurisdictions.
These subsidiaries may engage in commercial and regulated activities, provided they align with the DLT Foundation's objectives, are lawful, and obtain the necessary licenses from the relevant regulatory authorities.
7. What are the requirements to a firm for issuing a Legal Opinion on the Charter of a DLT Foundation?
You may find a list of law firms that have demonstrated familiarity with the DLT Foundations regulatory framework in the “Resources” section.
8. Which companies can issue a security audit of the DLT Framework?
ADGM does not endorse specific companies for conducting security audits of the DLT Framework. However, generally qualified entities include:
- Law Firms with an existing technology practice
- Consulting companies with technology practice
- Blockchain security audit companies
9. What types of companies are qualified to evaluate the White Paper and Tokenomics?
Qualified entities for evaluating White Paper and Tokenomics include:
- Law Firms with an existing technology practice
- Consulting companies with technology practice
- Blockchain security audit companies
10. Is a Tokenomics Paper required for a DLT Foundation that does not issue tokens?
No, a DLT Foundation that does not issue tokens is not required to provide a Tokenomics Paper.
However, such foundations must submit a declaration signed by the Founder(s) affirming that there are no immediate plans to issue tokens.
11. How should amendments, changes, and notifications be submitted to the Registrar for a DLT Foundation?
Amendments, changes, and notifications for a DLT Foundation must be submitted to the Registrar through a Company Service Provider (CSP) that has been appointed to represent the DLT Foundation.
12. What is the required process for submitting changes to the DLT Framework and smart contracts?
It is mandatory to notify the Registrar about any changes made to the DLT Framework associated with a DLT Foundation including any smart contracts.
When reporting changes, the following information must be meticulously detailed and submitted:
- Nature of the Changes : A comprehensive description of the modifications implemented, including technical details and the scope of the changes.
- Reasons for the Changes : An explanation of the factors or circumstances that necessitated these modifications. This might include enhancements, security updates, functional upgrades, or compliance adjustments.
- Alignment with Governing Documents : A confirmation that the changes adhere to the foundation's governing charter and documents. This should establish that the modifications are in line with the strategic objectives, operational guidelines, and regulatory commitments of the DLT Foundation.
In addition to the above, it is imperative that these changes are supported by a Security Audit Report. This report should be obtained from a reputable security firm with expertise in blockchain and smart contract audits. The audit report should:
- Validate the security and integrity of the updated smart contract.
- Ensure that the changes do not introduce any vulnerabilities or compliance issues.
- Confirm that the smart contract continues to operate as intended and in accordance with the DLT Foundation's regulatory obligations.
This notification must be done through a Company Service Provider (CSP) appointed to represent a DLT Foundation.
1. Regulations
2. Registration Checklist
3. Guidance
4. Forms and templates
5. Fees
6. Company Service Providers (CSPs)
However, you may also engage another CSP licensed in ADGM. Visit the CSP page to view the full list licensed company service providers.
7. Registered Auditors
8. Which companies can issue a security audit of the DLT Framework?
ADGM does not endorse specific companies for conducting security audits of the DLT Framework. However, generally qualified entities include:
- Law Firms with an existing technology practice
- Consulting companies with technology practice
- Blockchain security audit companies
9. Law Firms
As part of the application to register a DLT Foundation, the registrar requests a legal opinion on.
While we do not endorse or prescribe a specific law firm for our applicants, we understand that selecting a knowledgeable partner is a common concern. Below is a list of law firms that have demonstrated familiarity with our regulatory framework to assist you. Please note that the choice remains entirely at your discretion, ensuring you find the right match for your specific needs and objectives.
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