A Crypto Token is a type of Token that is used, or is intended to be used, as a medium of exchange or for payment or investment purposes (or that confers a right or interest in such Token). The definition of a Crypto Token does not include an Excluded Token, Investment Token or any other type of Investment. Only Crypto Tokens that have been recognised by the DFSA (see Token Recognition Criteria section) can be used in the DIFC (with limited exceptions).
A Crypto Token is a Fiat Crypto Token if, to stabilise its price or reduce volatility in its price, the value of the Crypto Token purports to be determined by reference to a single fiat currency. The DFSA sets additional recognition criteria for Fiat Crypto Tokens because they are typically marketed as providing a stable value relative to other crypto assets and hence attract broader use cases.
The DFSA does not permit Representative Offices to market Crypto Tokens or Crypto Token-related products and services (see GEN 2.26.1(4)) and Crowdfunding Operators to operate a Crowdfunding Platform that facilitates investments in Crypto Tokens (see GEN 2.2.10F). Further, a branch is not permitted to carry on Crypto Token related services (see GEN 7.2.2(8)).
Funds established or domiciled in the DIFC do not have limitations on investing in Recognised Crypto Tokens – they may invest all or part of their Fund Property in Crypto Tokens directly or indirectly. If the Fund is a Qualified Investor Fund (i.e., a Fund, the Units of which are offered only to Professional Clients by way of Private Placement with a minimum initial subscription of USD 500,000), it is also allowed to have 30% of its gross asset value invested in unrecognised Crypto Tokens, provided certain requirements are met.
