The Financial Services Regulatory Authority of the Abu Dhabi Global Market has launched a public consultation on a proposed regulatory framework for the staking of virtual assets, including Virtual Asset Staking, marking a significant step toward formalizing a rapidly growing segment of the digital asset market.
Consultation Paper No. 10 of 2025, published on 30 September, outlines a risk-based approach that would permit only licensed firms —specifically, virtual asset custodians and asset managers —to engage in staking activities on behalf of their clients. The move aims to bring clarity and investor protection to a practice central to Proof-of-Stake blockchain networks.
The proposed framework outlines which activities will be subject to regulatory oversight. Solo staking and providers offering only non-custodial technical services would remain outside the perimeter. However, authorized persons who hold or control client assets for staking would require a Financial Services Permission for Providing Custody or Managing Assets.
“This is a carefully calibrated approach,” said a regulatory expert familiar with the proposal. “By focusing on intermediaries that control client assets, the FSRA is targeting the area where the greatest potential for consumer harm exists, such as loss of funds or opaque practices.”
A key distinction in the proposal limits virtual asset custodians to staking only upon specific client instruction, reflecting their primary duty to safeguard assets. In contrast, virtual asset managers, who already operate on a discretionary basis, would be permitted to select staking opportunities and providers for their clients.
The consultation paper also lays out a suite of new obligations for licensed firms. These include conducting due diligence on staking service providers and smart contracts, entering into detailed written agreements, providing enhanced client disclosures, and securing a written non-objection from the FSRA before commencing staking services.
Notably, the FSRA is not currently proposing to mandate insurance coverage against “slashing” risks, where staked assets are penalized due to network infractions; however, it has indicated that it may reconsider this based on evolving market practices.
The consultation period is open until October 31, 2025. The initiative solidifies ADGM’s position as a jurisdiction seeking to balance financial innovation with robust oversight, as global regulators increasingly turn their attention to the crypto yield-generating sector.
