Digital Assets Code

Article 1Title of the Regulation

This Regulation No. REG/ZDFZ/04/2026, promulgated by OurWorld Zanzibar on 27 March 2026, shall be cited as "Zanzibar Digital Free Zone Regulation No. 3 of (2026), Digital Assets Code," or herein as the "Regulation."

Article 2Scope of the Regulation

This Regulation shall govern the treatment of Digital Assets within the Zanzibar Digital Free Zone ("Zone").

Article 3Definitions

The terms used herein shall have the meaning as described in the Glossary of Terms published by the Regulator.

Article 3 (Authorities)

Through the SEZ Designation (2024), the President of the Revolutionary Government of Zanzibar created a Digital Free Zone, to be regulated by Our World Zanzibar ("OWZ") (or the "Regulator"), to be known and operated as the Zanzibar Digital Free Zone. This Digital Assets Regulation is promulgated by OWZ pursuant to its powers and authorities as Regulator and consistent with the Zanzibar Digital Free Zone Charter (the "Charter"), adopted by OWZ Resolution No. 01 (25 June 2025).

Article 4Functions

1. This Regulation provides the legal basis for the licensing of Digital Asset services and activities that are provided, or engaged in, by Regulated Entities.
2. The Regulator shall have sole discretion to determine whether a service or activity requires the issuance of a License, which it shall exercise consistent with the Charter.
3. The Regulator may, in its sole discretion, determine whether a provider of services to Regulated Entities is exempt from the requirement to obtain a License that would otherwise be required under this, or any other, Regulation.
4. The Regulator shall employ a risk-based approach to the regulation of Digital Asset services and activities, which includes, in particular, the prevention of market abuse and the protection of the integrity and sustainability of the Zone.
5. The Regulator has the following functions:
   1. to issue, suspend or revoke Licenses provided under this Regulation (including the authority to issue exemption or No-Objection Letters);
   2. to prepare and maintain a Registry of Licenses and DASPs;
   3. to monitor and ensure DASP compliance with Zone Regulations, Rules, and Circulars, including through, inter alia, investigative measures and the imposition of penalties and fines; and
   4. to adopt additional measures related to Digital Asset services and activities as they affect Zone operations and goals, as reflected in the Charter.

Article 5Licensed Services

1. No Regulated Entity may engage in or provide the services or activities identified in this Article (5) without a License.
2. The following services and activities require a License issued by the Regulator:
   1. Advisory Services: the providing or agreeing to provide a personal recommendation to a client, either upon its request, or on the initiative of the DASP providing the recommendation, in respect of one or more actions or transactions relating to any Digital Assets.
   2. Broker-Dealer Services: any of the following constitute Broker-Dealer Services:
      1. arranging orders for the purchase and sale of Digital Assets between two Regulated Entities;
      2. soliciting or accepting orders for Digital Assets and accepting Fiat Currency, or other Digital Assets, for such orders;
      3. facilitating the matching of transactions in Digital Assets between buyers and sellers;
      4. entering into Digital Asset transactions as a dealer on behalf of the Regulated Entity for its own account;
      5. providing liquidity by providing uninterrupted buy/sell offers, or so-called, "market making," whether for its own account or using client Assets, for the purpose of facilitating trading and maintaining an active market for assets, including Digital Assets; or
      6. providing placement, distribution or other issuance-related services to Regulated Entities issuing Digital Assets.
   3. Custody Services: means safekeeping Digital Assets for or on behalf of another Regulated Entity and acting only on verified instructions from or on behalf of such Regulated Entity. All DASPs performing Custody Services shall segregate each client's assets in separate Digital Asset wallets.
   4. Exchange Services: any of the following constitute Exchange Services,
      1. conducting an exchange, trade or conversion between Digital Assets and Fiat Currency;
      2. conducting an exchange, trade or conversion between one or more Digital Assets;
      3. matching orders between buyers and sellers and conducting an exchange, trade or conversion between (i) Digital Assets and Fiat Currency, or (ii) one or more Digital Assets;
      4. maintaining an order book in furtherance of Article 5.b.4(a),(b), or (c) above.
   5. Lending and Borrowing Services: means carrying out a contract under which a Digital Asset shall be transferred or lent from one or more parties to one or more other parties where the Borrower shall commit to return the same, at the request of the Lender, at any time either during or at the end of the period agreed upon.
   6. Digital Asset Management & Investment Services: means acting on behalf of a Regulated Entity as an agent, or fiduciary, or otherwise taking responsibility for the management, administration or disposition of that Regulated Entity's Digital Assets. Examples may include, but shall not be limited to:
      1. investment management services or otherwise managing Digital Assets; and
      2. taking responsibility for the staking of Digital Assets for the purposes of earning fees or other amounts paid to validators and/or node operators of a Proof-of-Stake Distributed Ledger Technology.
   7. Digital Asset Transfer & Settlement Services: means receiving, transmitting, executing, clearing, settling, or facilitating the movement of Digital Assets between parties, whether on-chain or off-chain, including all related authorisation, execution, confirmation, error-resolution, and default-management functions, but excluding trading exchange operation, custody, or brokerage unless separately licensed.
   8. Digital Asset Issuance (and Offering) means the creation, generation, or initial distribution of Digital Assets through sale, subscription, allocation, Airdrop, Mining, Staking, or any other process, in exchange for value.
      1. The offering of Digital Assets to the public or to a defined group for the purpose of raising capital, distributing ownership, or granting access or usage rights.
      2. The initial placement of Digital Assets into circulation by or on behalf of their creator, whether for consideration or gratuitously, regardless of the underlying technology or distribution method.
      3. Secondary-market transfers of Digital Assets between persons are not considered Digital Asset Issuances.
3. Licenses granted pursuant to this Regulation are not transferable or assignable; any attempt to transfer, assign or similarly dispose of a license renders it null and void.

Article 6License Applications

1. The Application for a License ("Application") shall be in a form prescribed by the Regulator and made available to all Regulated Entities within the Zone OS.
2. Only Regulated Entities may submit an Application as required under this Regulation.
3. The Regulator shall provide notice to all Regulated Entities of the process for submitting an Application and the specific requirements for each License, including any applicable License Fees.
4. Upon accepting an Application, the Regulator shall, within a reasonable period of time:
   1. issue the License; or
   2. reject the Application and provide reasons therefor; or
   3. request additional information from the applicant, which it requires in order to decide whether to issue or reject the Application.
5. The rejection of an Application is without prejudice to resubmission in an attempt to address the Regulator's reasons for its rejection.
6. The Regulator has sole discretion whether to accept, modify or reject an Application on any basis.

Article 7License Terms

1. A License shall include the following:
   1. the name of the DASP;
   2. the Services authorized under the License;
   3. the License number;
   4. the period of time for which the License is valid;
   5. any conditions or additional requirements imposed by the Regulator.
2. A DASP shall display its License prominently in connection with any offer of Licensed Services.
3. In order to maintain the validity of a License, DASPs must pay the prescribed License Fee as designated, and within the time period specified, by the Regulator.
4. Applications to renew a License shall be made through the Zone OS on the schedule and process determined by the Regulator.

Article 8License Suspension and Revocation

1. The Regulator may serve a Notice of Non-Compliance on a DASP if the Regulator determines the DASP is responsible for a violation of the terms of a License or a breach of any applicable Regulation or Rule, including non-payment of the License Fees.
2. A Notice of Non-Compliance shall specify:
   1. the provision of the License, Regulation or Rule that was breached;
   2. the penalty imposed; and
   3. the period within which the breach must be rectified without further penalty.
3. If a DASP fails to rectify the breach or fails to pay the penalty within the period specified in the Notice of Non-Compliance, the Regulator may:
   1. serve a Notice of Suspension on the DASP;
   2. provide an opportunity for the DASP to present reasons why the License should not be suspended;
   3. suspend the License; and
   4. provide the DASP, within a reasonable time, a decision, which could include, inter alia, to lift the suspension, modify the license, require remedial measures, continue the suspension or revoke the License.
4. A DASP which has had its License suspended or revoked must cease all services and activities covered by the License until the Regulator informs the DASP that the suspension has been lifted.
5. The Regulator may revoke a License if:
   1. the DASP or a Beneficial Owner of the DASP has engaged in or facilitated activity in violation of any applicable law or Zone Regulation or Rule, or
   2. the DASP is abusing its License in a manner contrary to Zone policy.
6. Final decisions to suspend or revoke a License shall be made available to all Regulated Entities.

Article 9Registry of DASPs

1. The Registrar shall maintain a publicly available Registry of all Licenses (and exemptions) issued by the Regulator.
2. The Registry shall include the following information:
   1. the name of the DASP;
   2. the Licensed Services that the DASP may provide;
   3. the License number of the DASP;
   4. the time period for which the License is valid; and
   5. any other information as prescribed by the Regulator.

Article 10Operational Principles

A DASP shall, at all times:

1. maintain and hold any required level of capital in the manner and form specified by the Regulator as required;
2. manage any actual and potential conflicts of interest related to the Licensed Services;
3. comply with all applicable laws and regulations relating to anti-money laundering, counter-terrorist financing, and sanctions and establish, implement, and maintain robust policies, procedures, and internal controls to ensure such compliance;
4. manage and mitigate any actual and potential risks to the Zone and to any Regulated Entity to whom Licensed Services are provided;
5. ensure that any recording, storing, protecting, and transmission of data by the DASP is in full compliance with Zone Regulations, Rules and Circulars;
6. ensure that all marketing and promotional materials are clear, transparent and not misleading;
7. take reasonable measures to prevent market abuse and ensure the integrity and transparency of the Zone as a financial market; and
8. take reasonable steps to ensure its Beneficial Owners or any User employed by, or associated with, the DASP comply with this Regulation and all applicable Regulations, Rules, and Circulars in the Zone.

Article 11Recordkeeping

DASPs shall maintain all records sufficient to permit the reconstruction of any Transaction for a minimum of five (5) years following completion of the Transaction.

Article 12Internal Controls and Subsidiaries

1. Each DASP shall develop and implement procedures for the mitigation of risks proportionate to the nature and size of the DASP's business which must, at a minimum, include:
   1. measures to identify and assess risks related to money laundering, terrorist financing and other unlawful activities;
   2. regular monitoring of transactions for suspicious activity and procedures for reporting such transactions to the Regulator;
   3. written internal controls and regular audits to assess the effectiveness of these procedures in mitigating the risk of engaging in or facilitating unlawful activity.
2. Where a DASP is part of a group of Zone Enterprises, each Zone Enterprise must comply with the requirements laid out in this Article (12) if the activities of the Zone Enterprise create or contribute to any risk associated with the Licensed Services. Where necessary, this shall include the adoption of group-wide policies and procedures adopted in order to enhance compliance (e.g., information sharing, due diligence, training).

Article 13Compliance

1. DASPs must adhere to all Zone Regulations, Rules, and Circulars promulgated by the Regulator, as well as applicable local and international laws related to, inter alia, money laundering, financing for terrorism, fraud, corruption, tax evasion, human trafficking and the illicit drug trade.
2. Each DASP shall appoint a Compliance Officer, who shall be responsible for all measures adopted and implemented by the DASP to comply with this Article (13), which shall include any reporting requirements imposed by the Regulator or included in the DASP's License.
3. Every DASP shall develop a comprehensive Risk Assessment, including proposed mitigation measures, which it shall submit to the Regulator with its License application. The Risk Assessment shall take into account any risk assessment guidance issued by the Regulator.
4. All DASPs must be prepared to demonstrate sufficient skill, competence and capacity to provide the services authorized by the specific License issued by the Regulator.
5. All DASPs shall comply with applicable international and national legal instruments, including those related to Anti-Money Laundering and Combating the Financing of Terrorism, as well as, where applicable, relevant FATF Recommendations.

Article 14Digital Asset Transfers

1. For Digital Asset transfers equal to or greater in value than ten-thousand United States Dollars ($10,000.00):
   1. Originator DASPs shall obtain and maintain both Originator information and Beneficiary information as required by the Regulator;
   2. Beneficiary DASPs, upon completion of a transfer, shall obtain and maintain both Originator information and Beneficiary information as required by the Regulator.
2. All information regarding a transfer of Digital Assets, including Originator information and Beneficiary information, shall be made available upon request by the Regulator.
   1. Originator information includes: (a) the name and customer identification number of the Originator; (b) unique transaction reference number that permits traceability of the transaction.
   2. Beneficiary information includes: (a) the name of the Beneficiary; and (b) a unique transaction reference number that permits traceability of the transaction.
3. The Originator DASP shall maintain all Originator and Beneficiary information and transaction information for each transaction conducted under its License, consistent with the recordkeeping requirements included in this Regulation and any other Regulation, Rule, or Circular issued by the Regulator.
4. The Originator DASP shall not execute any transfer of Digital Assets unless it is able to obtain and verify Originator and Beneficiary information.

Article 15Market Offenses

No Regulated Entity shall engage in, attempt to engage in, recommend, or facilitate the commission of a Market Offense as defined in Articles (16) through (20). The Regulator may, from time to time, modify the list of activities that constitute a Market Offense and provide guidance to Regulated Entities with regard to this Rule's interpretation and enforcement. Regulated Entities shall, likewise, be held responsible, through appropriate sanction, for Offenses, as that term is defined in the PART V: OFFENSES of the Regulated Entity Code (REG/ZDFZ/02/2026).

Article 16Insider Dealing

1. Insider Dealing arises where a Regulated Entity possesses Inside Information, as defined in Article (17) below, and uses that information by carrying out a transaction, for its own account or for the account of a third party, directly or indirectly, in relation to a Digital Asset to which the Inside Information relates.
2. The use of Inside Information by cancelling or amending a transaction or order concerning a Digital Asset to which the Inside Information relates, where the transaction or order was started or placed before the Regulated Entity concerned possessed the Inside Information, shall also be Insider Dealing.
3. Recommending, counselling, procuring or otherwise facilitating a Regulated Entity to engage in Insider Dealing, or inducing a Regulated Entity to engage in Insider Dealing arises where the Entity possesses Inside Information and it recommends, counsels or procures on the basis of that Inside Information, that another Regulated Entity:
   1. carry out a transaction in relation to the Digital Asset to which that Inside Information relates, or induces that Entity to carry out such a transaction; or
   2. cancel or amend a transaction or order concerning a Digital Asset to which that Inside Information relates, or induces that Regulated Entity to make such a cancellation or amendment.

Article 17Inside Information

1. Inside Information means information of a precise nature, which has not been made public, and which, if it were made public, would reasonably be expected to affect the price of a Digital Asset or would affect the investment judgment of a reasonable individual in respect of a transaction involving that Digital Asset. The information need not be the determining factor behind any given transaction, but should have a material impact on the decision of any reasonable investor as to whether to carry out such a transaction.
2. Information shall be deemed to be of a precise nature if it indicates a set of circumstances which exists or which may reasonably be expected to come into existence, or an event which has occurred or which may reasonably be expected to occur, where it is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the price of a Digital Asset.
3. A Regulated Entity may possess Inside Information as a result of, but not limited to:
   1. being a member of the administrative, management or supervisory bodies of any Issuer;
   2. being an investor in any Issuer;
   3. having access to the Inside Information through any employment, profession, volunteering, contribution or duties;
   4. being involved in illegal or criminal activities; or
   5. any circumstances where the Regulated Entity knows or should reasonably have known that any information is Inside Information.

Article 18Unlawful Disclosure

1. Unlawful Disclosure arises where a Regulated Entity possesses Inside Information and discloses that Inside Information to any other Regulated Entity, except where the disclosure is made in the normal exercise of employment, a profession or duties.
2. The onward disclosure of recommendations or inducements amounts to Unlawful Disclosure where the Entity disclosing the recommendation or inducement knew or ought to have known that it was based on Inside Information.

Article 19Market Sounding

1. Market Sounding comprises the communication of information, prior to the announcement of a transaction in Digital Assets, in order to gauge the interest of potential investors in a possible transaction in Digital Assets and the conditions relating to it such as its potential size or pricing, to one or more potential investors in those Digital Assets by:
   1. an Issuer;
   2. a secondary offeror of a Digital Asset, in such quantity or value that the transaction is distinct from ordinary trading and involves a selling method based on the prior assessment of potential interest from potential investors; or
   3. a DASP or other third party acting on behalf or on the account of a Regulated Entity.
2. A disclosing Entity shall, prior to conducting the Market Sounding, specifically consider whether the Market Sounding will involve the disclosure of Inside Information. The disclosing Entity shall make a written record of its conclusion and the relevant reasons. It shall provide such written records to the Regulator upon request. This obligation shall apply to each disclosure of information throughout the course of the Market Sounding.
3. A disclosing Entity shall, before making the disclosure:
   1. obtain the consent of the Entity receiving the Market Sounding to receive the information;
   2. inform the Entity receiving the Market Sounding that it is prohibited from using that information, or attempting to use that information, by acquiring or disposing of, for its own account or for the account of a third party, directly or indirectly, Digital Assets relating to that information;
   3. inform the Entity receiving the Market Sounding that it is prohibited from using that information, or attempting to use that information, by cancelling or amending an order which has already been placed concerning a Digital Asset to which the information relates; and
   4. inform the Entity receiving the Market Sounding that by agreeing to receive the information it is obliged to keep the information confidential.
4. The disclosing Entity shall make and maintain a record of all information given to Entities receiving the Market Sounding, including the identity of the potential investors to whom the information has been disclosed, including but not limited to the Entity and the date and time of each disclosure. The disclosing Entity shall provide such record to the Regulator upon request.
5. Where information that has been disclosed in the course of a Market Sounding ceases to be Inside Information according to the assessment of the disclosing Entity, the disclosing Entity shall inform the recipient accordingly, as soon as possible.
6. Any Entity receiving a Market Sounding shall assess for itself whether it is in possession of Inside Information or when it ceases to be in possession of Inside Information.
7. The disclosing Entity shall keep the records referred to in this Regulation for a period of at least five (5) years.

Article 20Market Manipulation

1. Market Manipulation shall comprise the following activities, with the exception of any Accepted Practice:
   1. entering into a transaction, placing an order to trade or any other behaviour which: (a) gives, or is likely to give, false or misleading signals as to the supply of, demand for or price of a Digital Asset; or (b) secures, or is likely to secure, the price of one or several Digital Assets at an abnormal or artificial level;
   2. entering into a transaction, placing an order to trade or any other activity or behaviour which affects or is likely to affect the price of one or several Digital Assets, which employs a fictitious device or any other form of deception or contrivance;
   3. disseminating information through the media or through Zone communication channels, which gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of a Digital Asset, or is likely to secure the price of one or several Digital Assets at an abnormal or artificial level, including the dissemination of rumours where the Regulated Entity who made the dissemination knew, or ought to have known, that the information was false or misleading;
   Additional manipulative practices include: transmitting false or misleading information or providing false or misleading inputs in relation to a benchmark; conduct to inflate the price of a Digital Asset by securing a dominant position over the supply of or demand for a Digital Asset; the buying or selling of Digital Assets at a particular point in time in the trading or settlement cycle so as to have the effect of misleading investors acting on the basis of the prices displayed; the placing of orders on a trading venue (or any cancellation/modification thereof) which disrupts or delays the functioning of the trading system, makes it more difficult for other Regulated Entities to identify genuine orders, or creates or is likely to create a false or misleading signal about the supply of, or demand for, or price of, a Digital Asset; taking advantage of access to the media to voice opinions about a Digital Asset whilst having previously taken positions and profiting from the impact of the opinions voiced without disclosing that conflict of interest; the omission or failure to take any action which would correct manipulative activities; and distributing, maintaining, or otherwise making available to others any software, algorithm, or other computer programme designed to carry out any of the activities listed herein with the exception of any Accepted Practice.
2. Where the Regulated Entity referred to herein is a Zone Enterprise, the Regulation shall also apply to the Digital Residents who participate in the decision to carry out activities for the account of the legal entity concerned.
3. By way of exception, Accepted Practices shall include, but not be limited to, the following, which shall not amount to Market Manipulation:
   1. entering into a lending, borrowing, repurchase or reverse repurchase transaction in respect of a Digital Asset for legitimate trading purposes which does not disrupt the fair and orderly functioning of any market involving Digital Assets and without any intention to do so;
   2. entering into a transaction in a Digital Asset for the purposes of satisfying a prior legal or regulatory obligation provided that the obligation entered into does not disrupt the fair and orderly functioning of any market involving Digital Assets and without any intention to do so; and
   3. use of an algorithmic or high-frequency trading strategy that is not designed to have any of the effects described in this Regulation and which has been designed and implemented in such a way as to not disrupt the fair and orderly functioning of any market involving Digital Assets and without any intention to do so.

Article 21Global Business Companies

Only a Zone Global Business Company ("GBC") may obtain a License for the Issuance or Offering of Digital Assets to other Entities within the Zone.

Article 22White Paper Requirement

1. A Licensed GBC shall not issue or offer for sale a Digital Asset unless it has made publicly available online, and easily accessible, a White Paper that includes:
   1. contact and other information about the GBC responsible for the issuance of the Digital Assets, as well as any and other identifying information as required by the Regulator;
   2. all information about the Digital Asset that a holder of the Digital Asset would reasonably be expected to need to know, including any rights or obligations attached to the Digital Asset;
   3. the risks and benefits of the Digital Asset and its uses;
   4. a prominent warning about the possibility that the Digital Asset may reduce in value to zero, as well as about situations in which the Digital Asset may not be liquid;
   5. the venues in which the Digital Asset will be available for secondary market trading;
   6. all applicable fees and costs associated with acquiring and holding the Digital Asset, when and how these fees and costs are calculated, and when and to whom these costs and fees are paid; and
   7. any additional information the Regulator may, from time to time, require.
2. Before a White Paper is made available to the public, the GBC shall submit it for the Regulator's approval in connection with the Application for a License.

Article 23Communication Requirements

Any Regulated Entity responsible for the issuance or offering of a Digital Asset shall:

1. not communicate anything in connection with the offer, sale or issuance of a Digital Asset that is false, misleading or deceptive;
2. not promote the Digital Asset before the White Paper has been approved by the Regulator and made publicly available;
3. publicly disclose the number of Digital Assets currently in circulation on an ongoing (at least monthly) basis; and
4. comply with the same market conduct obligations (relating to misuse of non-public information, market manipulation, or related market conduct rules) as if the Digital Assets were tradeable on a securities marketplace.

Article 24Minimum Capital Requirements

1. All Issuers of Digital Assets must maintain a minimum paid-in capital of ten percent (10%) of the total value of the Digital Asset at the moment of Digital Asset Issuance to the public.
2. Minimum capital requirements are subject to change as determined by the Regulator.
3. In the event that the paid-in capital of a DASP falls below the minimum capital requirement, the DASP must promptly notify the Regulator and cease operations until the minimum capital requirement is met.