ADGM FSRA Proposes Regulatory Framework for Virtual Asset Staking

The Riffle

The Abu Dhabi Global Market’s (ADGM) Financial Services Regulatory Authority (FSRA) has unveiled a proposed framework for Virtual Asset (VA) staking, setting out how intermediaries holding or controlling client assets should operate. The move reflects ADGM’s intent to balance innovation with investor protection, as staking gains prominence in blockchain finance. The consultation, open until 31 October 2025, invites industry feedback to shape this evolving regulatory landscape.

Through Consultation Paper No. 10 of 2025, the FSRA introduces rules that would govern custodians and asset managers offering staking services. The framework clearly defines what is in scope, lays out licensing and reporting requirements, and excludes other yield-generating activities like liquidity mining, yield farming, and arrangements involving liquid staking tokens (LSTs) .

What’s In Scope

The framework is tightly focused on staking activities linked to Proof-of-Stake (PoS) consensus mechanisms. Other yield-generating activities are explicitly excluded, including:

• Liquidity mining

• Yield farming

• Arrangements involving Liquid Staking Tokens (LSTs)

The FSRA has indicated it will continue to monitor LST developments for potential future regulation.

Who Can Stake?

Only Authorised Persons with the right Financial Services Permission (FSP) may provide staking services:

• On Client Instruction → Custodians or Asset Managers can stake assets when directed by clients.

• Discretionary Staking → Only VA Asset Managers with Managing Assets permission may stake on behalf of clients.

Activities outside this perimeter include solo staking and staking-as-a-service providers who do not hold client assets .

Core Requirements for Authorised Persons

To safeguard client funds and ensure operational resilience, the FSRA proposes several obligations:

1. Licensing & Asset Restrictions – Staking is permitted only for “Accepted Virtual Assets (AVAs).”

2. FSRA Non-Objection – Firms must notify the FSRA and obtain approval before commencing.

3. Due Diligence – Assess staking providers’ infrastructure and review smart contracts for errors and asset recoverability.

4. Written Agreements – Contracts must confirm client ownership of assets, monitoring rights, and breach reporting.

5. Client Disclosure & Reporting – Risks must be clearly communicated, and client statements should identify staked assets .

Future Considerations

The FSRA has stopped short of mandating insurance at this stage but signals it may consider coverage for risks such as slashing penalties or staked asset losses in line with emerging global practices .

Why It Matters

This proposal underscores ADGM’s role as a leader in digital asset regulation, aiming to foster trust while enabling responsible growth in the UAE’s financial ecosystem. By providing clarity on staking, the FSRA is building a framework that protects investors, strengthens compliance, and aligns with international standards.

The consultation is open until 31 October 2025, offering stakeholders the chance to contribute to shaping the rules that will govern one of the most significant areas in digital finance. 

Read the full briefing document presented by 10 Leaves here -