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    DLT Foundations Framework

    Purpose-built for Blockchain Foundations and DAOs

    DLT Foundations Framework

    World’s First Framework for Blockchain Foundations and DAOs

    This purpose-built framework, created in collaboration with industry participants, sets a global benchmark by addressing the unique regulatory and operational needs of the DLT and Blockchain sector, thereby providing a legal structure for Blockchain Foundations and DAOs.

    The Framework fully acknowledges Virtual Assets, enabling the issuance of tokens as well as facilitating token governance. It allows entities to set up with no bylaws, thereby enabling a variety of governance methods, including token voting and the use of smart contracts.

    With provisions for migration from other jurisdictions and legal fencing to shield the entity assets from foreign claims, coupled with the absence of a physical presence requirement, the Framework extends a warm welcome to Foundations and DAOs, whether they wish to set up brand new entities, satellites, or migrate completely.

    Ingrained in the direct application of English Common Law, ADGM’s legal framework offers a universal appeal, fostering a prosperous digital asset ecosystem within a globally recognised jurisdiction.

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    Why Choose ADGM DLT Foundations? Unique Benefits FAQs Resources Contact Us

    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.

    Unique Benefits of DLT Foundations

    There are several key features and benefits that render ADGM’s DLT Foundations a unique proposition for blockchain foundations, DAOs, and other DLT-focused entities. From robust security and innovative governance to active industry participation, establishing independent legal personalities, and offering a flexible scope of activities, DLT Foundations sets a global benchmark, fostering a thriving ecosystem.

    Purpose-built for
    the Industry

    Tailored framework addressing the unique needs of Blockchain Foundations and DAOs.

    Innovative Governance

    Facilitating decentralized governance through token voting and smart contract-enabled processes.

    Independent Legal
    Personality

    Establishing ownerless legal structures that can engage in legal proceedings.

    Token Issuance

    Well-defined legal and regulatory guidelines for issuing tokens.

    Token Rights

    Clear guidelines on token rights, promoting transparent governance.

    Legal Fencing

    Protecting Foundation's assets from foreign claims.

    No Physical
    Presence Requirement

    Flexibility with operational setup without mandatory physical presence.

    Migration of
    Existing Foundations

    Smooth migration process for existing foundations from other jurisdictions.

    Ongoing Collaboration with
    the Industry Participants

    Continuous engagement with industry stakeholders to align with evolving market needs.

    No Bylaws

    Operational flexibility with an absence of bylaws, promoting diverse governance methods.

    Efficient Setup

    Quick registration and competitive setup cost, ensuring a streamlined entry and operational readiness.

    Business-Friendly
    Ecosystem

    Access to a vibrant, business-friendly ecosystem fostering operational efficiency and growth.

    Frequently Asked Questions

    1. How can I register a DLT Foundation?

    To register a DLT Foundation, it is essential to engage with a Corporate Service Provider (CSP) that is registered in the ADGM.

    The CSP will assist you in navigating through the registration process. They will provide guidance on the compliance requirements, help in preparing and submitting necessary documents, and ensure that all procedures align with the Regulations. Given below is the list of CSPs.

    CSP Name
    Contact Name
    Email
    CSP Name / Contact Name / Email
    BANKS LEGAL LIMITED
    Nathan Banks
    TMF GROUP FIDUCIARY SERVICES LIMITED
    Stewart Adams
    IDARAH CORPORATE LIMITED
    Sepide Foroutan
    M-HQ LTD
    Rima Chodhri
    J. AWAN & PARTNERS LIMITED
    Jehanzeb Awan
    ASSISS LTD
    Yasmina Al Amm
    GRIFFIN CORPORATE SERVICES LTD
    Andrew John Baker
    ARGENTUM LAW LTD
    Nicole Ruth Alva
    ADS INVESTMENT SOLUTIONS LIMITED
    Mira Azouqa
    SANCTUARY CORPORATE SERVICES FZ LLC
    Mukesh Poduval
    STROLLA LLP
    Alfred Strolla
    ELNAGGAR & PARTNERS LIMITED
    Ahmed Elnaggar
    10 LEAVES LIMITED
    Rohit Ghai
    KPI AHLI CHARTERED ACCOUNTANTS
    Mahesha Shetty
    CROWE MAK LLP
    Umesh Narayanappa

    2. Are there any specific profile restrictions for a Founder or Councillor of a DLT Foundation?

    Under the DLT Foundations Regulations 2023, there are certain criteria and restrictions regarding the profile of a Founder(s) or Councillor of a DLT Foundation. These typically relate to their professional background, experience, and potential conflicts of interest. The Founder(s) and Councillors are also required to complete a fit and proper questionnaire as part of the application process.

    3. Can a DLT Foundation issue Tokens?

    Yes, a DLT Foundation can issue utility tokens.

    4. How can we determine if a token issued by a DLT Foundation is a utility token or a security token?

    You may find the description in the Guidance “Guidance – Regulation of Initial Coin/Token Offerings and Crypto Assets under the Financial Services and Markets Regulations

    5. Can a DLT Foundation issue more than one type of Tokens?

    Yes, a DLT Foundation can issue more than one type of utility token. The DLT Foundations Regulations 2023 include provisions regarding the categories and issuance of tokens. This encompasses decisions on the types of tokens that a DLT Foundation can issue, as well as any limitations on these types of tokens and the blockchain protocols used for their issuance. Therefore, a DLT Foundation has the flexibility to issue various types of utility tokens as outlined in its governing charter and in compliance with the regulatory framework.

    6. Is it mandatory for a DLT Foundation that does not issue tokens to provide a Tokenomics Paper?

    If a DLT Foundation does not engage in token issuance, the requirement to provide a Tokenomics Paper, which typically outlines the economic model and distribution strategy of the tokens, is not applicable.

    In such case we require a declaration signed by the Founder(s) stating that the DLT Foundation does not plan to issue a token in the immediate future.

    7. Who is qualified to issue a report verifying the compliance of a Whitepaper and Tokenomics with the DLT Foundations Regulations 2023 and the Charter of the DLT Foundation?

    A compliance report for a Whitepaper and Tokenomics, ensuring alignment with the DLT Foundations Regulations 2023 and the Charter of the DLT Foundation, should be issued by a professional with expertise in DLT regulatory compliance. This could be a consultancy firm proficient in DLT regulations.

    The entity should have thorough knowledge and experience in the field of blockchain and DLT, along with a deep understanding of the regulatory and legal aspects governing DLT Foundations. Their role is to critically assess and confirm that the Whitepaper and Tokenomics adhere to the regulatory standards set forth in the DLT Foundations Regulations 2023 and are consistent with the foundational charter of the DLT Foundation.

    The report must be issued by a reputable company that is acceptable to the Registrar and has experience in assessing such documents. When selecting a company for this critical task, it is imperative to ensure that they possess the following qualifications:

    1. Expertise in Blockchain and DLT: The company should have extensive knowledge and a solid background in blockchain technology and Distributed Ledger Technology (DLT), especially in areas related to token economics and the development of white papers.
    2. Experience in Legal and Regulatory Compliance: The company must be proficient in evaluating compliance with legal and regulatory requirements. This is particularly important for regulations specific to DLT Foundations and the issuance of tokens.
    3. Good Reputation: The company should hold a strong reputation in the industry. This factor is crucial as it indicates the company's reliability and credibility in providing accurate, comprehensive assessments.

    These criteria ensure that the company issuing the report has the necessary expertise and integrity to accurately assess the compliance of the Whitepaper and Tokenomics with the DLT Foundations Regulations 2023 and the Charter of the DLT Foundation.

    8. Which entity is authorized to provide a security report for a DLT Foundation?

    A compliance report for a Whitepaper and Tokenomics, ensuring alignment with the DLT Foundations Regulations 2023 and the Charter of the DLT Foundation, should be issued by a professional with expertise in DLT regulatory compliance. This could be a consultancy firm proficient in DLT regulations.

    A reputable information security company, approved by the Registrar, is responsible for issuing a security report for a DLT Foundation. This company, experienced in security audits, must conduct a thorough examination and produce a report ensuring that the DLT Foundation's framework complies with the DLT Foundations Regulations 2023. The cost for this service is generally covered by the founders of the DLT Foundation.

    9. What are the required contents of a security report for a DLT Foundation?

    The report must explicitly state that the DLT Framework and its components, such as smart contracts, have been audited for compliance with the Tokenomics (if available), the Whitepaper, and the Charter of the DLT Foundation. This audit confirms the congruence of the DLT Framework's operational and structural elements with these foundational documents, ensuring adherence to both technical and security standards, as well as strategic, operational, and ethical guidelines.

    The security report for a DLT Foundation should present a thorough evaluation of its information systems and processes. This includes a comparative analysis against best practices based on internationally recognized standards. Prepared by a reputable independent information security company, the report ensures that the DLT Foundation's security protocols meet the prescribed standards and adhere to the guidelines set forth in the DLT Foundations Regulations 2023. "The security report for a DLT Foundation should present a thorough evaluation of its information systems and processes. This includes a comparative analysis against best practices based on internationally recognized standards. Prepared by a reputable independent information security company, the report ensures that the DLT Foundation's security protocols meet the prescribed standards and adhere to the guidelines set forth in the DLT Foundations Regulations 2023."

    10. If a smart contract is updated, what kind of notification should a DLT Foundation submit to the Registrar?

    In accordance with the DLT Foundations Regulations 2023, it is mandatory to notify the registrar about any changes made to smart contracts associated with a DLT Foundation. This notification is crucial as smart contracts are fundamental to the operational integrity and compliance framework of the DLT Foundation.

    When reporting changes in smart contracts, the following information must be meticulously detailed and submitted:

    1. Nature of the Changes: A comprehensive description of the modifications implemented in the smart contract, including technical details and the scope of the changes.
    2. 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.
    3. Alignment with Governing Documents: A clear demonstration of how 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 process of notification and submission of a security audit report ensures ongoing compliance with the DLT Foundations Regulations 2023 and maintains the foundation's commitment to operational transparency and regulatory adherence.

    11. Can a DLT Foundation have subsidiaries?

    Yes, a DLT Foundation can have subsidiaries both local and overseas.

    Resources

    1. Regulations

    Distributed Ledger Technology Foundations Regulations

    The newly implemented legislative structure is designed to provide a comprehensive framework for DLT Foundations and Decentralised Autonomous Organisations (DAOs).

    Read more

    International Accounting Standards

    The Board of Directors of Abu Dhabi Global Market, in exercise of the powers conferred by section 68(3) of the DLT Foundations Regulations 2023, hereby makes the following Rules.

    Read more

    2. Registration Checklist

    DLT Foundations Registration Checklist

    3. Guidance

    Guidance on Permitted Activities for DLT Foundations

    4. Forms and templates

    ADGM DLT Foundations - Model Charter DLT Foundations Resolution Notification of Appointment of Company Service Provider

    5. Fees

    The Board of Directors of Abu Dhabi Global Market, in exercise of the powers conferred by section 68(3) of the DLT Foundations Regulations 2023, hereby makes the following Rules.

    Read more

    6. Company Service Providers

    Following Company Service Providers have self-declared their ability to accept DLT Foundation Applications:

    CSP Name
    Contact Name
    Email
    CSP Name / Contact Name / Email
    BANKS LEGAL LIMITED
    Nathan Banks
    TMF GROUP FIDUCIARY SERVICES LIMITED
    Stewart Adams
    IDARAH CORPORATE LIMITED
    Sepide Foroutan
    M-HQ LTD
    Rima Chodhri
    J. AWAN & PARTNERS LIMITED
    Jehanzeb Awan
    ASSISS LTD
    Yasmina Al Amm
    GRIFFIN CORPORATE SERVICES LTD
    Andrew John Baker
    ARGENTUM LAW LTD
    Nicole Ruth Alva
    ADS INVESTMENT SOLUTIONS LIMITED
    Mira Azouqa
    SANCTUARY CORPORATE SERVICES FZ LLC
    Mukesh Poduval
    STROLLA LLP
    Alfred Strolla
    ELNAGGAR & PARTNERS LIMITED
    Ahmed Elnaggar
    10 LEAVES LIMITED
    Rohit Ghai
    KPI AHLI CHARTERED ACCOUNTANTS
    Mahesha Shetty
    CROWE MAK LLP
    Umesh Narayanappa

    However, you may also engage another CSP licensed in ADGM. Visit the CSP page to view the full list licensed company service providers.

    Read more

    7. Registered Auditors

    ADGM’s registered auditors are responsible for reinforcing and maintaining trust in financial reporting to ensure transparency and integrity of businesses operating in the jurisdiction.

    Read more
    If you have questions or need any assistance, we're here to help