ADGM's New DLT Foundations: A Game-Changer For DAOs And The UAE Crypto Industry

Introduction

Abu Dhabi Global Market (ADGM) has recently published a consultation paper on its proposed Distributed Ledger Technology (DLT) Foundations Regulations 2023, aiming to create a tailored legislative framework specifically designed for Decentralized Autonomous Organizations (DAOs). The proposed regulations are poised to revolutionize the legal structures for DAOs and fuel the growth of the crypto industry in the UAE.

Background

DAOs, with their focus on decentralization and automation, have emerged as the preferred governance structure for DLT-based projects. However, such governance structures lack a recognized legal status unless they adopt a pre-existing legal form for their operations. Foundations have become the most popular legal wrapper for DAOs, particularly those in the Cayman Islands, Panama, and Switzerland. However, most existing foundation regimes pre-date the advent of DAOs, leading to certain roadblocks concerning decentralized and