Dubai VARA published a 45-page-long “Virtual Asset and Related Activities Regulation 2023.”
Dubai Virtual Asset Regulatory Authority (VARA), one of the world's first independent regulators for virtual assets incorporated in Dubai, has published guidelines for virtual asset service providers (VASPs) operating in the Emirate.
According to the press release shared on February 7th, the “Virtual Asset and Related Activities Regulation 2023” document comments on seven licensed virtual asset (VA) activities.
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The 45-page-long document presents guidelines for companies offering “advisory services, broker-dealer services, custodial services, exchange services, lending-borrowing services, payments, and remittances services, and va management and investment services.”
United Arab Emirates-based crypto and blockchain lawyer, Irina Heaver, shared a Twitter thread outlining the main rules noted in the “Virtual Asset and Related Activities Regulation 2023.”
With the new regulations, Dubai’s crypto regulator requires all virtual asset service providers (VASPs) that want to operate in the Emirates, to obtain a VARA license. It is worth noting that this rule does not apply to crypto firms operating under the Dubai International Financial Centre (DIFC).
In the document, VARA highlighted that the institution will penalize all crypto-related firms that fail to comply with VARA’s regulations. The fines range from 20,000 to 200,000 AED (from $5,500 to $55,000).
On top of that, VARA prohibited the issuance of privacy coins and noted that all traders with trading capital above $250 million have to get registered by VARA.
VARA also will ask crypto firms to pay fees for licensing, advisory services, or annual supervision of crypto-related services. According to Heaver, “fees are very reasonable” and range from 40,000 AED ($11,000) to 200,000 AED ($55,000), depending on the service.
When talking about the new regulations, His Excellency Helal Saeed Almarri, Director General Dubai’s Department of Economy & Tourism and Chairman of VARA’s Executive Board, stated:
Dubai’s D33 Economic Plan has outlined our mission to establish the Emirate as the capital of the Future Economy anchored by Metaverse, AI, Web3.0 and Blockchain. VARA launches the first-of-its-kind VA framework structured to accelerate our New Economy agenda, augmenting secure, and sustainable ‘global’ market growth.
It is worth noting that, at the beginning of 2023, regulators around the world are imposing new rules for crypto firms. On February 6th, the South Korean Financial Services Commission issued guidelines specifying which digital assets are considered and controlled as securities.