Dubai releases crypto regulations for virtual asset service providers

In Dubai, the ‘Virtual Asset Regulatory Aothority’, or VARA for short, is the regulator responsible for overseeing crypto laws. They have now issued new guidelines for all virtual asset service providers operating in the emirate.

Established rules for operating VASPs

According to information provided by Irina Heaver, a crypto and blockchain lawyer based in the United Arab Emirates (UAE), VARA has issued the “Full Market Product Regulations”. These rules consist of 4 mandatory rulebooks and activity-specific rulebooks, which define the rules for operating VASPs (Virtual Asset Service Providers). The rules only apply to market participants in Dubai, with the exception of those operating under the Dubai International Financial Center (DIFC), a free zone with its own regulator.

In addition to the rulebooks, the Dubai regulator also stressed that all market participants, whether they have a VARA license or not, must comply with marketing, advertising and promotions regulations. Violators are fined from $5,500 (20,000 UAE dirhams) to $55,000 (200,000 UAE dirhams), and repeat offenders can be fined as much as $135,000 (500,000 dirhams).

Guidelines for other aspects are also given

The new regulations also provide guidelines for other aspects, such as the issuance of virtual assets. According to Heaver, there are several exclusions in the new VARA update. As a result, for example, the issuance of privacy coins is prohibited in Dubai and traders with a trading capital of more than $250 million must register with the VARA.

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The rules also set fees for advisory services, licensing and annual oversight for storage, exchanges, broker-dealers and loan services. The cost can range from $11,000 (40,000 dirhams) to $55,000 (200,000 dirhams) depending on the services. It turns out to be a good thing that the VARA is now providing more clarity for the crypto space. Finally, the following was stated:

Regulatory certainty is very good for business, it is good for consumers, investors and for the Emirate of Dubai. The regulations have been much anticipated and mostly applauded.

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