A Regulatory Oasis

The ADGM operates under its own jurisdiction, applying English common law and harnessing an independent financial services regulator, the Financial Services Regulatory Authority (FSRA). This autonomy has allowed ADGM to be remarkably agile in developing a comprehensive regulatory framework specifically for digital assets – one that many consider to be among the most progressive globally.

This forward-thinking approach covers:

• Virtual Asset Service Providers (VASPs): Licensing exchanges, custodians, brokers, and other service providers dealing with virtual assets.

• Distributed Ledger Technology (DLT) Foundations: A framework for organizations built on decentralized principles.

• Digital Securities: Clear guidelines for tokenized traditional securities.

This regulatory clarity, combined with an attractive tax environment – 0% corporate income tax for businesses for 50 years and no capital gains tax – has created an irresistible magnet for digital asset firms worldwide.

Who’s Calling ADGM Home?

The list of prominent digital asset players setting up shop in ADGM is growing by the day, signaling its undeniable gravitational pull:

• Binance: As of 2026, the world’s largest crypto exchange is officially calling Abu Dhabi home. The company secured various licenses within the jurisdiction, making it a critical hub for their Middle East and North Africa (MENA) strategy. This presence underscores ADGM’s role as a key operational and regulatory base for the world’s largest crypto exchange.

• Kraken: Another major global exchange, Kraken, is licensed to operate a Multilateral Trading Facility (MTF) and custodian in ADGM, becoming one of the first globally regulated virtual asset exchanges in the region.

• Bybit: This past October, the exchange secured the UAE’s first Securities and Commodities Authority (SCA) license. This milestone is a testament to the shared commitment of building a fully regulated and compliant digital asset ecosystem in the middle east.

• Galaxy Digital: The crypto financial services firm has recently established a presence, eyeing the institutional opportunities within the market.

• M2: This new, fully regulated virtual asset custodian recently launched in ADGM, offering yield-generating strategies with a strong focus on compliance and institutional-grade services.

These aren’t just satellite offices; firms are building strategic operational hubs designed to leverage ADGM’s unique advantages.

Bigger Events and Milestones

ADGM isn’t just attracting individual companies; it’s hosting significant industry developments:

• ADGM Digital Asset Forum: Annually brings together global leaders, regulators, and innovators to discuss the future of digital assets, blockchain, and Web3.

• Strategic Partnerships: ADGM consistently signs MOUs and partnerships with global financial bodies, further integrating its digital asset ecosystem into the broader international financial infrastructure.

• Pioneering Regulatory Firsts: The FSRA has often been among the first global regulators to publish comprehensive rules for specific digital asset activities, such as DLT foundations or specific types of virtual asset custody, setting precedents for other jurisdictions.

The Gateway to APAC for the US (and Beyond)

For US-based digital asset companies, navigating the complex and often fragmented regulatory landscape at home can be a significant hurdle. ADGM offers both a compelling solution and a strategic advantage:

• Regulatory Clarity & Predictability: Unlike the piecemeal approach in the US, ADGM provides a single, clear, and comprehensive regulatory framework. This predictability is invaluable for scaling operations.

• Time Zone Advantage: Located strategically, ADGM bridges the gap between Western markets (Europe, Americas) and the vast, rapidly growing Asian Pacific (APAC) market. US firms can establish an ADGM presence to serve APAC clients during their active hours, effectively operating 24/7.

• Access to Capital & Talent: The UAE – Abu Dhabi specifically – is a burgeoning hub for capital, talent, and technological innovation. This provides US firms with access to a new investor base and a diverse talent pool.

• Neutral Ground: For many global players, ADGM offers politically neutral ground for international expansion, free from some of the geopolitical complexities that might impact other jurisdictions.

Looking Ahead

• Institutional Adoption: ADGM’s robust framework provides the comfort level TradFi institutions require. We may see more tokenized real-world assets (RWAs) initiatives stemming from ADGM.

• Continued Regulatory Evolution: While already advanced, ADGM’s FSRA will continue to evolve its framework to address new innovations, such as Decentralized Autonomous Organizations (DAOs), advanced DeFi protocols, and the intersection of AI with digital assets.

Conclusion

The Abu Dhabi Global Market is more than just a financial center; it’s a carefully designed ecosystem purpose-built for the digital asset age. Its clear regulatory framework, strategic location, and growing list of prominent inhabitants make it an indispensable player for any digital asset company aiming for global reach and sustainable growth in the coming years. For those eyeing Asia, ADGM isn’t just a stopover; it’s the launchpad.

Reach out to mac@lockchain.io with any inquiries.

ATHENS, GA., February 25, 2025—Lockchain.ai, the leading AI-powered Blockchain Risk Management platform, has closed its Series A funding. The nearly $5 million round will fuel further development, adding features that improve the speed and efficiency of clients managing cryptocurrency positions. White Star Capital led the round, with additional investment from Lerer Hippeau, Arrington Capital, and Sonic Boom Ventures, among others.

Lockchain.ai launched in April 2024 to deliver an automated risk management solution that helps traders, investors, and fund managers in the blockchain ecosystem identify and preemptively manage risk factors that may impact portfolio positions. Since its launch, the company has experienced strong traction with firms such as Broadridge and GSR. It provides risk management recommendations to portfolios with more than $2B aggregate value.

“Cryptocurrency continues to be an exciting market with incredible opportunities for growth and increased utilization. It is also volatile, making data, intelligence, and speed key to managing portfolio accounts at scale,” said Andrew Howard, CEO of Lockchain.ai. “Having worked with many of the largest portfolio teams for the past two years, we’ve proven our models and grown baselines for our AI that effectively deliver insights, recommendations, and predictions at speeds that make them productive.”

A key differentiator is the platform’s use of generative AI to rapidly consume and analyze thousands of data sources. This enables traders to:

• A real-time view of risk;

• Instant notification of important on- and off-chain events that may impact their portfolio;

• Actionable and straightforward insights on the potential effects of those events;

• Predictive impact analysis of contagion risk; and

• An automation engine to respond to events with pre-built playbooks and exit strategies.

“The Lockchain platform enhances our risk management practices for digital asset entities by automating and standardizing core processes. This strengthens our decision-making and empowers us to appropriately assess complex opportunities with speed and precision,” said Sean Swift, Operational Risk Manager at GSR.

Lockchain.ai provides always-on due diligence and risk monitoring for asset managers and traders who want to know the real-time security status of the assets they trade. This includes examining custodians and counterparties to help traders make informed decisions at scale.

“Lockchain delivers powerful insights that can be leveraged to advance the maturation of useful data available to broker-dealers, asset managers, exchanges, and wallet providers to make investment decisions about digital assets,” explained Aviad Stein, Global Head of Innovation and Strategy at Broadridge. “Their proprietary AI produces reliable and appropriate outputs in a scalable way and helps us continue our lead-first approach in progressing the state of standardization and compliance of digital asset regulations across the globe.”

“With our Series A funding secure, we are focused on expanding key functional areas and enriching our detection and monitoring capabilities,” continued Howard. “Using an innovative and integrated security fabric, we’ll enable greater predictive controls and realize true, portfolio-wide risk management capabilities.”

Key functionality expansions include:

• Material Event Detection: expanded intelligence monitoring includes material events that may impact an asset, protocol, or counterparty.

• Accelerated Data Discovery: A unified data viewer provides access to the complete information collection on an entity to accelerate listing and due diligence investigations. The data is filterable, searchable, and exportable, so your teams quickly get the data they need.

• Automated Custom Frameworks: client forms, processes, and reports can be integrated into a custom framework engine, allowing Lockchain data to be mapped directly to client needs. Pre-built frameworks for popular regulatory agencies such as NYSDFS and ADGM are also included.

• Regulatory Compliance Automation: risk disclosure and monitoring support for the Markets in Crypto-Assets Regulation (MiCA), among others.

“Lockchain is setting new standards for risk management in the blockchain space and we’re pleased to be extending our support for the team. The combination of their advanced AI capabilities and deep understanding of market dynamics positions them as a game-changer for asset managers, traders, and regulators navigating the complexities of this fast-evolving ecosystem,” said Sep Alavi, Managing Partner, White Star Capital.

Lockchain.ai is headquartered in Athens, Georgia with offices in New York City.

About Lockchain.ai

Lockchain.ai is the world’s first risk management platform for blockchain assets, leveraging generative AI to provide traders and asset managers the intelligence necessary to understand portfolio risks continuously and in real time. Lockchain.ai provides AI-powered risk management recommendations to portfolios with more than $2B aggregate value. With the backing and engagement of industry leaders from across cybersecurity, application security, digital currency management, and blockchain technologies, the Lockchain platform is available today.

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• EU will implement intelligent crypto regulatory framework mandates between 2024 and early 2025.

• MiCAR and DORA have the advantage of setting a standard and central supervisory authority.

• With these new regulations, Lockchain’s automation and AI platform can enhance efficiency and lower compliance costs.

The digital asset landscape in Europe is on the verge of a transformative shift with the introduction of the Markets in Crypto-Assets Regulation (MiCAR) and the Digital Operational Resilience Act (DORA). These regulatory frameworks, set to be implemented in the next few months, are aimed at governing the crypto space and improving operational resilience, enhancing security controls, and promising to bring clarity to an evolving ecosystem. For Crypto Asset Service Providers (CASPs), understanding the impact of these regulations on their current controls is crucial to ensuring compliance and fostering trust with their clients.

MiCAR and Its Benefits

Set to take full effect on December 30, 2024 (some requirements have already been implemented), MiCAR is designed to provide a unified regulatory framework across the European Union (EU) for all participants in the crypto market. Scarcely has an industry like crypto asked for some form of regulation, and MiCAR was developed to answer that call by ensuring transparency, increasing consumer protection, and maintaining market integrity.

The key advantages of MiCAR for CASPs

• Regulatory Clarity: MiCAR offers a consistent regulatory framework across all EU member states. This eliminates the patchwork of national regulations, allowing CASPs to operate safely and efficiently across borders.

• Investor Protection: With MiCAR, CASPs will be required to ensure adequate transparency and disclosures for their offerings. This will help safeguard investors' interests, which in turn will increase trust in the ecosystem.

• Reduced Compliance Costs: By standardizing regulations across the EU, MiCAR minimizes the need for CASPs to comply with multiple, differing regulations. This harmonization can lead to cost savings and operational efficiency for companies expanding their European footprint.

• Licensing and Passporting: MiCAR introduces a licensing regime for CASPs, allowing them to offer their services across the EU once licensed in a single member state. This passporting feature is especially advantageous for scaling businesses.

DORA and Its Impact on Operational Resilience

MiCAR sets the stage for DORA, which focuses on the controls CASPs require to protect against loss. While MiCAR focuses on regulating crypto-assets and related services, DORA aims to improve operational resilience across the financial sector, including CASPs. As the financial ecosystem becomes increasingly digital, ensuring the strength of technology and operations becomes a critical priority.

DORA strengthens CASPs by addressing the following:

• Operational Risk Management: DORA mandates that CASPs implement robust risk management frameworks to handle operational disruptions such as cyberattacks, data breaches, and system failures. Given their high reliance on technology, operational resilience is critical for their stability.

• ICT Incident Reporting: DORA introduces the requirement for standardized reporting of Information and Communication Technology (ICT) incidents. This enables regulators to see system vulnerabilities and threats better while ensuring CASPs respond quickly to mitigate risks.

• Third-Party Risk: CASPs often rely on third-party providers for various technology services. DORA requires that CASPs monitor and manage risks associated with third-party dependencies to avoid disruptions in critical services.

This last component of DORA is the idea of third-party risk management. CASPs will be required to have exit strategies to continue their business in case one or more of its third parties can no longer provide services. One primary requirement is the monitoring of risks and the need for additional risk assessments due to significant changes. This means more than monitoring for vulnerabilities and exploits. Many instances throughout the history of digital assets involved counterparties that were poorly managed, at best, and, at worst, plainly fraudulent. This caused contagion throughout the ecosystem, leading to long periods of mistrust of the industry.

Therefore, monitoring third parties is vital to a proper compliance and risk management program. How are firms going to monitor for incidents that might affect them? Can they rely on Crypto Twitter to provide accurate and timely information? 

While digital assets present unique challenges for security and risk management teams at CASPs, solutions exist to meet these firms' needs. 

Enterprise institutions, in particular, view these novel technical, security, counterparty, operational, token, protocol, and smart contract risks much differently than many incumbent crypto-native firms. These institutional firms' risk mitigation processes will look similar to those in traditional financial markets. Yet, they must account for a potentially steep learning curve and increased compliance costs.

While tools exist for traditional markets, they may lack speed, accuracy, and scalability for the global and nonstop digital asset markets. AI and automation can be very useful in the compliance arsenal to reduce cost, increase efficiency, and prevent stalling growth by relying on manual interventions and monitoring. 

The Lockchain.ai platform automates many of the significant requirements of MiCAR and DORA imposed on CASPs, including the continuous and real-time monitoring of risks presented by crypto tokens and third parties. The platform is built on a foundation of scalable architecture using carefully tuned AI designed to ingest and analyze a wealth of on- and off-chain data, producing useful outputs for compliance and risk management teams. This reduction in manual analysis considerably lowers costs and increases efficiency, allowing firms to focus on growth.

Conclusion

MiCAR and DORA are designed to set intelligent standards for digital asset servicing and trading firms. By establishing a regulatory framework that supports growth while managing risks, Europe is setting the stage for long-term success in the rapidly evolving digital asset space. This framework is a good indication of the eventual approach of US regulators once they discontinue their audacious path of regulation by enforcement. 

Learn more about the Lockchain.ai solution here.

It’s no secret that blockchain technology is a disruptive force in the finance world through its promises of innovation and decentralized ecosystems. Blockchain and crypto startups are also attracting massive institutional capital - some estimates put investments at more than $90 billion as of February. However, with great opportunity and value comes great responsibility, particularly when it comes to securing money that leverages blockchain technology. Since 2022, the total value lost in the blockchain space is substantial - more than $6B - prompting traditional finance organizations investing in the industry to reevaluate their risk management strategies. 

As the demand for blockchain investments grows, the demand and expectations for addressing security and financial risks facing blockchain-based companies should also grow. Lockchain.ai helps meet that demand by enabling analysts and investors to do their due diligence, providing a platform that delivers a holistic view of real-time, continuous blockchain risk intelligence.

The blockchain space is unique, presenting a combination of people, organizational, financial and technological risks. Speed is of the essence in this dynamic environment where events unfold rapidly, and organizations can’t rely on humans to react to the volume of potential threats quickly enough. Understanding and reacting to this reality requires a tool that provides an ongoing, comprehensive view of the landscape and potential future risks. 

Lockchain.ai's platform offers this multifaceted window into the security risk of an organization. Designed for users of all technical proficiencies, it empowers traditional financial institutions to comprehend complex security landscapes. The platform combines multiple checks across three key domains: organizational trust, external resilience, and security. It also leverages AI to ingest information from multiple sources and evaluate it against a set of criteria we developed to marry both basic risks and novel threats of the blockchain ecosystem with battle-tested traditional cybersecurity and trust principles. 

It’s critical to keep in mind that traditional approaches investors use to address potential risk like quarterly or yearly check-ins are woefully insufficient in the blockchain space. The interconnectedness of entities in the blockchain ecosystem necessitates continuous monitoring so organizations can take a proactive approach to security and risk management. 

Lockchain.ai's platform maps these dependencies, identifying how a risk event in one portion of the ecosystem can have a contagion effect on others. This feature can show platform users the contagion risk of their investments in black swan events, such as what we saw with FTX. It also ensures real-time monitoring for market changes and potential risk events, surfacing relevant information for proactive risk management. Some examples of platform benefits identified by our design partners and beta users include venture capital firms conducting due diligence before a funding round, streamlining the processes for institutional compliance officers to evaluate pre-trade risks more effectively, assisting ETF issuers monitor asset custody providers, and helping traders assess and monitor post-trade risks to their positions.

As traditional finance organizations work to navigate the complexities of blockchain investments and bring in new capital, a paradigm shift in risk management is imperative. At Lockchain.ai, we’re working to ensure our platform helps traders and investors meet the moment, enabling them to do the necessary due diligence and fill technical gaps when it comes to addressing blockchain risks. 

In an industry where speed and agility are paramount, the only question remains: what is your firm doing to stay ahead of the curve to fully realize the benefits of blockchain technology?

Yes, Captain Obvious, so what?

Well, how do you possibly keep up with the constant change? How do you filter through the barrage of noise? How do you decide if a change, whether good or bad, in a currency, protocol, or counterparty is something you should care about?

Uhh…

There has never been a greater need for robust and continuous risk assessment tools that can help secure the growing world of cryptocurrencies, decentralized finance (DeFi) protocols, and centralized exchanges. That’s why I’m excited to be a part of Lockchain.ai, a pioneering startup we recently launched that is primed to revolutionize the way we analyze and manage digital asset risks in the blockchain ecosystem. Especially helping traders and investment managers protect crypto and other blockchain-based assets. 

Traditional risk management methods often fall short in addressing the complex and dynamic nature of blockchain-based systems. Implementing a solution like ours would normally require an army of analysts pouring over documents to find needles of information in the proverbial haystack. Oh, and tomorrow we get to do it all again since the needle has moved (pun definitely intended). 

We built Lockchain.ai to fill this gap in the industry by providing cutting-edge risk analysis tools through the power of Artificial Intelligence, specifically Large Language Models (LLM) that can act as as sort of digital analyst. This approach is a game changer for risk management in the blockchain ecosystem. Recently, an investment firm used our platform to perform due diligence on a brand new DeFi protocol before making a sizable strategic investment. They did this in a matter of hours, not waiting days or weeks for a report.

Lockchain.ai’s platform uses several advanced machine learning techniques, including entity recognition and natural language processing, to understand and interpret complex on- and off-chain blockchain data, smart contract code, and security audit reports. We use various data processing techniques to first clean and normalize the data to ensure it’s ready for analysis. The AI algorithms then analyze the data to identify patterns, relationships, and anomalies that could indicate potential risks. This continuous process is crucial for detecting vulnerabilities and risks in real-time to ensure proactive risk management.

That all sounds great, but risk management is a critical topic. How do you know that the AI isn’t just making stuff up?!?

Great question! One of the main challenges with LLMs is their tendency to present false or outdated information, known as hallucinations. This can lead to a lack of trust among users, especially when they expect specific, current responses. Just like a human analyst, our AI analyst requires some guidance and parameters to ensure that it doesn’t become overzealous. At Lockchain.ai, we’re doing several things to address this concern and ensure that our analysis is both current and accurate.

Retrieval augmented generation (RAG) is a technical solution that serves as a crucial guardrail in our risk management approach. RAG operates by interfacing with an external knowledge base that is separate from the AI model's initial training data. Before generating a response, the model queries this knowledge base to retrieve the most pertinent and recent information. The retrieved information is then combined with the model's analytical abilities to produce an output that is not only relevant and accurate but also highly applicable to the current context.

RAG is not the only guardrail we’re using to ensure the precision of our risk assessments. By adjusting the LLM’s “temperature”, we can control the randomness of the generated output, ensuring that the information provided is both accurate and reliable. After all, we’re analyzing risk here, not writing poetry. Additionally, we continue to invest considerable effort in prompt engineering, carefully designing the input prompts for the LLM to guide it towards producing the desired output. This not only helps in reducing hallucinations but also ensures that the AI's responses are more aligned with the specific context and requirements of web3 security.

Looking ahead, the Lockchain.ai engineering team is already working to expand our AI capabilities and exploring new technical approaches to enhance digital asset security. We continue to evolve our platform capabilities to balance the speed of market change with accurate, actionable risk intelligence. Stay tuned as we continue on this journey and reach out to learn more about our platform and our mission to protect and empower the blockchain community.

Aidan Kehoe, former CEO of the Barracuda Networks-acquired SKOUT Cybersecurity, and I founded Lockchain.ai with Matt Higgins to bring automated risk management and security solutions to cryptocurrency trading and digital currency asset management, an industry that’s been underserved for too long. As former CEO of Kudelski Security, I helped some of the world’s largest companies with managed detection and response (MDR) services and provided in-demand smart contract auditing through the company’s Blockchain Security Center. 

Based on our experiences and lessons learned, we created Lockchain.ai to fill an urgent need in the market: a real-time risk management and security platform that gives both security and non-security investment professionals the capabilities to navigate the changing – and challenging – landscape that is the cryptocurrency industry.

While smart contract audits are important, they are just one piece of the puzzle when it comes to securing digital currencies on and off chain. Our SaaS platform complements existing security professional services by offering critical risk management and security infrastructure to give clients unprecedented real-time visibility and transparency.

Unlike some solutions that require security experts, Lockchain.ai transforms the complex world of cryptocurrency into continuous straightforward and actionable insights for traders and asset managers. Further, our platform ingests and leverages data from a variety of sources, including web3, that enables clients to understand risks that may affect their portfolio. As more Bitcoin ETFs come online, the ability to examine custodians and counterparties involved with portfolios and reconciling on- and off-chain risks based on real-world events is critical.

We’re excited for more users to reap the benefits of the Lockchain.ai platform, as well as future offerings to boost its capabilities that are already in the works. Interested customers can sign up for more information through our website and join a webinar on April 9^th to learn more

We made a decision early to build Lockchain.ai with a small but senior team. We were fortunate to recruit some long-time friends with serious technical chops and some new friends with years of experience in the market. It has been a fun journey for the past year because of the people. We have also leaned heavily on a network of advisors and partners that were critical to our success to date.

Finally, I’d be remiss if I didn’t thank our funders and backers, who include industry leaders from across cybersecurity, digital currency, and crypto.  We started this company during the middle of the crypto winter, believing this was the best time to build, and are thankful for those that believed in us. 

While there are too many to specifically thank, Ben Lerer and Andrea Hippeau at Lerer Hippeau deserve a special call out and our gratitude for being the first to believe in us during a difficult time in the market.  A hat tip as well to my long-time friend Matt Comyns from Artico Search for the introduction to Aidan and Matt Higgins. 

Some clichés are true; security is a shared responsibility and our systems are only as strong as their weakest link. Digital currencies are here to stay and Lockchain.ai is the pioneering solution that will help eliminate weak links and protect the future of the industry.

Cheers,

Andrew