3.1-1 Application

(1) This Part 3 applies to a Person carrying on, in or from the AIFC, one or more of the following Regulated Activities in relation to Digital Assets:

(a)           Dealing in Investments as Principal;

(b)           Dealing in Investments as Agent;

(c)            Managing Investments;

(d)           Managing a Collective Investment Scheme;

(e)           Providing Custody;

(f)             Arranging Custody;

(g)           Advising on Investments; and

(h)           Arranging Deals in Investments.

(2) The requirements in DAA 3.3 and 3.4 do not apply if the services provided on behalf of, or for, Clients do not involve the holding or control of Digital Assets, nor the use of DLT or similar technology to carry on the Regulated Activities in relation to Digital Assets.

(3) A Digital Asset is held or controlled by a Digital Asset Service Provider if:

(a)   the Digital Asset is directly held by the Digital Asset Service Provider in an account or Digital wallet; or

(b)  the Digital Asset is held in an account or Digital wallet in the Digital Asset Service Provider’s name; or

(c) the Digital Asset is held by a legal entity, or in an account or Digital wallet in the name of the legal entity that is controlled by the Digital Asset Service Provider; or

(d)  the private key or seed phrase of the Digital wallet is held or controlled by the Digital Asset Service Provider.

(4) A Digital Asset Service Provider must incorporate into its internal documents the substance of additional provisions relevant to Derivatives to be found in the COB Rules, for the purpose of regulating operations in Digital Assets Derivatives.