The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) has granted financial services permission to virtual asset firm M2 to operate a multilateral trading facility from the United Arab Emirates capital.

In an Aug. 16 announcement, the Abu Dhabi-headquartered M2 said the regulatory approval would allow institutional and retail clients in the UAE to “buy, sell and custody virtual assets,” such as Bitcoin (BTC) and Ether (ETH).

The M2 platform, which is scheduled to launch later in 2023, has been developed over the past year with a long-term vision to establish “the highest levels of trust, security and integrity in the emerging virtual asset class,” the announcement said.

Once live, the M2 platform will also allow UAE users to buy cryptocurrencies using fiat money, as well as access to derivatives and yield services.

“The process of obtaining the license is the first step on our journey, and we will remain in close dialogue with ADGM to ensure transparency around the custody of client assets,” said Stefan Kimmel, the CEO of M2.

“Over the past five years, the ADGM regulatory framework has established clear rules for those operating in the virtual assets sector, and M2 will uphold the highest standards to reflect their vision as the UAE continues to affirm its reputation as a global leader in this space,” he added.

A spokesperson for the ADGM explained to Cointelegraph that the FSP issuance aligns with “international regulatory best practices,” adding:

"[It] involves a structured risk assessment of the applicant’s proposed business model, governance, and controls against the FSRA’s regulatory requirements.”

Although the M2 platform is not yet active, the ADGM said the virtual asset firm and any other applicant went through an in-principle approval (IPA) that laid out the conditions to be met before securing an FSP.

In an email response to Cointelegraph, Kimmel explained that the ADGM’s licensing application process was “demanding due to the high standards” set for full multilateral trading facility permits. But he clarified that this strict due diligence means UAE users can trust their platform meets the standards of security and transparency. He added:

"Meeting and exceeding regulatory requirements will be a continuous process for the team that will allow us to offer an extensive range of services to retail users and institutions in this region and around the world."

Kimmel added that his team is currently focusing on the upcoming launch of the M2 platform and its planned offerings, and looks to be an exchange permitted in all jurisdictions.

According to the executive, the virtual assets firm has initiated licensing processes in several European countries.

Related: Uzbekistan permits two banks to issue crypto cards

The ADGM introduced a comprehensive virtual asset regulatory framework in 2018. It has since attracted a number of major companies dealing with cryptocurrencies to set up businesses in its regulated financial and economic zone.

“At ADGM, our mission has always been centered around unlocking new growth opportunities and fostering investments in the virtual asset sector, ADGM CEO Salem Al Darei said. “We remain committed to enhancing Abu Dhabi’s digital asset landscape and actively supporting the diversification of our thriving economy,” he added.

In November 2022, the ADGM awarded cryptocurrency exchange Binance financial services permission after being granted in-principle approval from the financial watchdog in April.

Subsequently, cryptocurrency exchange Rain received similar regulatory permission in July 2023 to offer virtual assets brokerage and custody services to UAE users.

“[An] FSP holder will only be allowed to commence live operations after it has completed the development and operational testing of its platform systems to the FSRA’s satisfaction,” the spokesperson explained.

They added that these firms, including M2, are “subject to ongoing compliance obligations in accordance with the regulations and rules of FSRA at all times.”