The Abu Dhabi Global Market (ADGM) has signed a memorandum of understanding (MoU) with leading blockchain auditing firm Hacken to ensure strict adherence to minimum industry benchmarks.
According to a joint statement by both parties, the collaboration will pave the way for new security standards as ADGM pivots toward blockchain and other emerging technologies. Described as a “unique synergy,” the MoU seeks to create new on-chain monitoring solutions in line with global best practices.
The arrangement will be focused on ADGM’s DLT Foundations framework, a regulatory playbook for operators in the free-trade zone. The framework provides step-by-step guidance for service providers seeking operational licenses in the United Arab Emirates.
To ensure uniformity, Hacken will deploy its auditing standards for ADGM’s Regulatory Authority (RA) to scrutinize the applications of intending blockchain firms in the region. The new auditing standards will extend to firms that have clinched operational permits, as they are required to make regular disclosures to the regulatory authority.
In addition to its impressive audit abilities, Hacken will rely on new artificial intelligence (AI) tools to bolster its compliance capabilities. The audit firm has garnered much experience outside the Middle East, collaborating with European and North American authorities.
“Our experience in working with public sectors, such as our audits for the European Blockchain Services Infrastructure and our cooperation with government entities, provides a solid foundation for this partnership,” said Hacken CEO Dyma Budorin.
Going forward, the new auditing standards will be applied to decentralized autonomous organizations (DAOs) and legacy foundations based around blockchain. Since releasing its regulations in Q4 of 2023, the ADGM has recorded a spike in applications by blockchain service providers looking to set up shop in the zone, accentuating the need for increased scrutiny.
“At ADGM, we are committed to setting unprecedented global standards in regulatory compliance and security by harnessing the transformative power of blockchain and AI,” read the statement. “Our partnership with Hacken exemplifies our innovative drive and dedication to excellence.”
Pitching its tent with Web3
The ADGM has made public its intention to become the leading Web3 hub in the Gulf by increasing the size of its bet in the ecosystem. In early 2023, the zone received a $2 billion investment to support local Web3 firms while attracting key global players to the UAE.
Rather than merely focusing on investments, the ADGM has found utility for blockchain by leaning on the technology for legal processes in its courts. To ensure a smooth operation, the ADGM is sinking a chunk of its resources to float watertight regulations through public consultations and a string of high-profile partnerships.
