New Dubai Regulations Require Crypto Firms to Obtain License

The Virtual Assets Regulatory Authority (VARA), the sole regulator of virtual assets in the emirate of Dubai, published a set of regulatory requirements for crypto firms planning to operate in the UAE’s biggest emirate. The rules cover various activities related to virtual assets, including custody, advertising, exchanges, and more.

Dubai Crypto Regulator Unveils 11 Rulebooks for Crypto Firms

Dubai’s virtual assets regulator unveiled regulations requiring crypto businesses to obtain relevant licenses to offer services. The rulebooks outline a set of comprehensive requirements from issuance and exchange standards to advertising services, the Virtual Assets Regulatory Authority (VARA) said in a release Tuesday.

“VARA’s Virtual Assets regulatory framework is focused on the risks that each Virtual Asset activity presents to the market, and seeks to provide VASPs with a clear framework of rules which apply to their particular operations and business models, while maintaining a baseline market standard of compliance across core regulatory domains.”

– VARA Launches Full Market Product Regulations

According to VARA, the crypto companies that want to provide services in Dubai must comply with four compulsory rulebooks, including “Company, Compliance & Risk Management, Technology & Information, and Market Conduct.” Furthermore, the regulator developed seven additional rulebooks to address risks related to virtual asset activities such as advisory services, lending and borrowing, custody, and exchange, among others.

The crypto firms will only be asked to comply with each activity rulebook if they previously obtained VARA licenses to provide virtual asset services. In addition, the regulator outlined a set of regulations for issuing all digital assets and digital asset marketing services.

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UAE Striving to Become a Leading Fintech Hub in the Middle East

Established last year, the VARA oversees all crypto-related activities and firms the in the Emirate of Dubai. Its establishment places all virtual asset activities in the UAE, including cryptocurrency trading and mining, under some form of regulation.

The latest move marks yet another effort by Dubai to become a fintech hub in the region. In March 2022, the UAE’s vice president Sheikh Mohammed bin Rashid Al-Maktoum announced the adoption of a regulatory law to oversee licensing, regulation, and governance of digital assets and the companies offering them. The move came four years after the UAE recognized crypto assets as securities.

Several crypto companies, including the European arm of the collapsed FTX, have claimed to have obtained a license from VARA. However, a UAE lawmaker said during a panel at the 2023 World Economic Forum last month that no companies have won approval from the regulator yet.

Do you think the UAE could become one of the leading fintech hubs on a global level? Let us know in the comments below.