Animoca Brands Receives Provisional Approval from Abu Dhabi's Financial Regulator

Animoca Brands has announced that it has secured preliminary approval from Abu Dhabi’s Financial Services Regulatory Authority (FSRA), marking a significant advancement for the company in its goal to operate as a regulated fund manager within the rapidly evolving digital asset marketplace of the Middle East.

Key Takeaways

Animoca Brands has obtained in-principle approval from Abu Dhabi’s FSRA for fund management.
The approval propels the company deeper into institutional finance in the digital asset space.
The move aligns with Abu Dhabi’s goal of attracting blockchain and digital asset firms.
A reverse merger with Nasdaq-listed Currenc Group could further Animoca's market ambitions.
Companies must meet specific operational and financial requirements to activate their in-principle approval.

Animoca

Expansion into the Middle East with Regulatory Support

Animoca Brands, a leading Web3 investor based in Hong Kong, announced its in-principle approval from the FSRA, which is a crucial step toward establishing itself as a regulated fund manager in one of the Middle East's key hubs for digital assets. With this approval, Animoca can manage a collective investment fund within or originating from the Abu Dhabi Global Market (ADGM), provided they meet specified conditions and obtain final approval.

This development signifies Animoca's commitment to expanding its footprint in the institutional sector, especially after a history of involvement in gaming, NFTs, and digital assets.

The company positions itself as a provider of digital asset advisory services and is involved in managing over 600 portfolio companies. This preliminary approval enhances its strategy by clarifying its regulatory stance, which is essential for capital formation and fund development.

Animoca's presence in the Middle East is growing, and it is actively operating in Dubai to foster Web3 initiatives across the region. The Abu Dhabi approval is a step forward in its objective to establish a well-regulated presence across critical markets, subject to acquiring local licenses and permissions.

Omar Elassar, Animoca Brands' managing director for the Middle East, stated, “The UAE is becoming a significant hub for Web3 and digital asset activities. This approval aligns with our strategy to create regulated pathways that allow institutional participation while collaborating with founders and businesses in the ecosystem.”

Ongoing Growth and Market Moves

Animoca Brands is pursuing a regulatory expansion while also eyeing a return to the public markets. Recently, the company entered a non-binding agreement with Nasdaq-listed Currenc Group aiming for a reverse merger with a valuation target of about $1 billion, expected to close by late 2026. If the merger goes through as planned, Animoca's shareholders would hold approximately 95% of the combined entity's shares, while Currenc shareholders would possess around 5%.

This proposed merger would represent a significant comeback for Animoca in the public markets after its delisting from the Australian Securities Exchange in 2020, which was due to governance issues and its active participation in crypto-related ventures.

Meeting Regulatory Requirements in Abu Dhabi

In Abu Dhabi, receiving provisional approval is just an initial step for crypto companies. Interested firms must first engage in discussions before applying, providing a detailed regulatory business plan, financial forecasts, ownership details, and frameworks for anti-money laundering and counter-terrorist financing.

The FSRA scrutinizes various aspects, including technology, custody arrangements, and the credentials of senior staff, before issuing in-principle approval. This approval acts as a conditional green light rather than a full license.

Companies must fulfill several conditions, including reaching minimum capital levels, finalizing their operational systems, acquiring residence visas for key personnel, and arranging third-party audits. Once they demonstrate compliance with these requirements within the stipulated timeframe, they can secure full Financial Services Permission, enabling them to operate within the ADGM, obtain a commercial license, and commence regulated activities related to virtual assets such as trading, custody, or advisory services. Typically, well-prepared applicants can complete the entire process within a few months.