The Riffle
The Abu Dhabi Global Market (ADGM) has released a comprehensive discussion paper outlining its proposed regulatory approach to crypto mining activities. While crypto mining is not classified as a regulated financial service under the FSRA, it will be treated as a licensed commercial activity under ADGM’s commercial licensing regime.
The framework introduces clear licensing requirements, robust operational and transparency expectations, and a risk-based supervisory model—positioning ADGM as a structured yet innovation-friendly jurisdiction for responsible crypto mining operations.
Key Highlights
Crypto mining is classified as a commercial activity, not a financial service.
All entities operating “in or from ADGM” must obtain a Commercial Licence.
The regime is technology-neutral, covering Proof-of-Work, Proof-of-Stake, and future consensus mechanisms.
Strong emphasis on cybersecurity, physical security, and operational resilience.
Mandatory disclosure of UBOs and on-chain wallet addresses.
Enhanced oversight for ADGM entities managing overseas mining operations.
Supervision is risk-based, scaling with size and complexity of operations.
Regulatory Positioning: What Is (and Isn’t) Regulated
Under the Commercial Licensing Regulations 2025, crypto mining is categorised as Business Activity 7230, defined as validating transactions on a decentralised ledger in exchange for digital asset rewards.
Importantly:
Crypto mining does not fall under FSRA-regulated financial services.
Small-scale, non-commercial personal mining is generally out of scope.
Taxation of mined assets remains a federal UAE matter, outside the RA’s remit.
Licensing & Assessment Requirements
Before commencing operations, entities must secure a Commercial Licence specifying “Crypto Mining” as a permitted activity. The Registration Authority (ADGM Registration Authority) may require detailed submissions, particularly for large-scale operators, including:
Operational plans outlining hardware efficiency, scale, and risk management
Infrastructure and resilience frameworks, including disaster recovery
Cybersecurity controls aligned with international standards (e.g., ISO 27001, NIST)
On-chain disclosures, covering wallets and smart contract addresses owned or controlled by the entity
Why This Matters
This framework signals ADGM’s intent to balance innovation with accountability. By separating crypto mining from financial regulation while still imposing strong governance, transparency, and security standards, ADGM creates a credible environment for institutional-grade mining operations.
For global operators, the message is clear: ADGM can function as a legitimate headquarters jurisdiction—but with real supervisory expectations attached.
Supervision, Enforcement & Global Oversight
The RA will apply a risk-sensitive supervisory model, using tools such as:
Off-site and on-site inspections
Independent audits and attestations
Thematic reviews
Third-party technology for on-chain monitoring
Breaches may result in warnings, financial penalties, remediation directions, or licence suspension or revocation.
For ADGM-registered entities managing overseas mining portfolios, additional obligations apply:
Disclosure of global operational footprint and ownership structures
Documented jurisdictional risk assessments
Alignment of overseas operations with ADGM governance standards
Potential cooperation with international regulators
Next Steps & Consultation Timeline
The framework is currently open for stakeholder consultation under Discussion Paper No. 1 of 2026. The RA is seeking feedback on areas such as:
Minimum security baselines
Approval thresholds for outsourcing and energy arrangements
Disclosure requirements for mining reward wallets
Key Dates
Discussion Paper published: 23 January 2026
Feedback deadline: 20 March 2026
Final guidance: Expected in 2026
Failure to meet the final standards may impact licence approvals, variations, or renewals.
