Updated: 28 July 2026
TL;DR: Abu Dhabi Global Market (ADGM) regulates tokenized fund interests and SPV-based structures as Digital Securities under the Financial Services Regulatory Authority (FSRA) - not as virtual assets. This is a distinct, more institutional regime from VARA, in place since 2018, commonly used for cross-border and institutional tokenization projects.
Why ADGM for Tokenization Structuring
ADGM operates under English common law with its own independent court system, which makes it attractive for institutional investors and cross-border structures. Since 2018, ADGM has operated one of the world's first comprehensive regulatory frameworks for digital assets, including a dedicated Digital Securities classification for tokenized funds and SPV interests.
How an ADGM SPV Structure Works
A Special Purpose Vehicle is incorporated in ADGM to hold the underlying asset (real estate, fund interests, or other assets)
Ownership interests in the SPV are digitized into tokens, each representing a defined fractional interest.
Because the token represents a share in a corporate entity rather than a virtual asset in itself, it is classified as a Digital Security under FSRA rules, not as a VARA-regulated virtual asset.
This distinction matters for licensing: Digital Securities fall under securities regulation, with different capital, governance, and disclosure requirements than VARA's ARVA/FRVA framework.
ADGM vs. VARA: Practical Differences
Factor | ADGM (Digital Securities) | VARA (ARVA, Category 1 VA Issuance) |
Legal basis | Securities regulation under FSRA, in place since 2018 | Virtual Asset Issuance Rulebook, ARVA category effective 19 June 2025 |
What's tokenized | Shares/interests in an SPV or fund | Direct asset-referenced tokens (real estate, commodities) |
Legal system | English common law, independent ADGM courts | UAE civil law framework under Dubai Law No. 4 of 2022 |
Typical use case | Institutional funds, cross-border structures | Retail-facing and commercial asset tokenization in Dubai mainland |
AML Zone Service
AML Zone supports SPV structuring and company registration in ADGM for tokenization projects, including compliance model development, AML/KYC framework implementation, and preparation of licensing documentation and internal policies.
Frequently Asked Questions
Because the token represents an economic interest in a company (the SPV) rather than a stand-alone virtual asset, ADGM's FSRA classifies it as a Digital Security, governed by securities rules rather than VARA's virtual asset framework.
Yes, some structures separate the SPV that holds the underlying asset (in ADGM) from the entity conducting virtual-asset activities in Dubai mainland (under VARA), depending on the business model.
ADGM generally requires a registered presence for incorporated entities; specific office requirements depend on the type of SPV and licensed activity.
ADGM's digital assets framework has operated since 2018, several years before VARA was established under Dubai Law No. 4 of 2022 in March 2022.
ADGM's common-law framework and independent court system are commonly used for institutional investors, fund managers, and cross-border structures seeking a jurisdiction with an established securities-law regime.
REFERENCES
- adgm.com - ADGM Digital Assets framework (FSRA)
- rulebooks.vara.ae - Virtual Asset Issuance Rulebook
- vara.ae - official VARA regulator
Related
Start Your Tokenization Process
By submitting this form, I acknowledge that I have read and agree to the Privacy Policy, and I consent to the processing of my personal data.
Please note: We do not provide any personalized investment advice, token selection guidance, or transaction recommendations. AMLzone is a compliance consultancy and project management services provider, not a Virtual Asset Advisor.
Please note: We do not provide any personalized investment advice, token selection guidance, or transaction recommendations. AMLzone is a compliance consultancy and project management services provider, not a Virtual Asset Advisor.