The Virtual Assets and Related Activities Regulations 2023 have been published by Dubai’s Virtual Asset Regulatory Authority (VARA). The Regulations outline a thorough framework for virtual assets (VAs) based on cross-border financial security and economic sustainability. In order to combat the global concerns of money laundering (ML) and terrorism financing (TF), which may result from the potential abuse of emerging technologies, the UAE has remained dedicated to enabling these drivers safely.
The VA Framework is built with regulatory certainty in mind, giving the market more clarity on what to expect in terms of operator responsibilities. Additionally, it requires that licensed entities within the Emirate adhere to anti-money laundering (AML) requirements and gold-standard risk assurance, according to WAM. His Excellency Helal Saeed Almarri, Director General of 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.
In Q1-2022, VARA was launched as the world’s only independent and specialist regulator for Virtual Assets to serve as the accelerator for a truly borderless Digital Economy. Ahead of its first anniversary since establishment, VARA launches the first-of-its-kind VA framework structured to accelerate our New Economy agenda, augmenting secure, and sustainable ‘global’ market growth. This custom-designed construct reflects UAE’s commitment to building responsible safeguards, and Dubai’s confidence in delivering a progressive VA ecosystem that nurtures next-gen innovation.”
VARA will promote economic stability, investor protection, and jurisdictional resilience linked with VA as the Authority mandated to conduct VA oversight throughout the Emirate of Dubai (excluding DIFC). Seven licensed VA activities are covered by the new regulations: advisory services, broker-dealer services, custodial services, exchange services, lending-borrowing services, payments and remittances services, and VA management and investment services. Furthermore, the VARA regime regulates the activity of issuing tokens in order to give consumers more information about the obligations of the issuer and the new tokens that are being introduced in Dubai.
A path to complete FMP licensing will be made available to legacy UAE-based Virtual Asset Service-Providers (VASPs), current MVP Operational license applicants, and holders of either the Provisional or Preparatory MVP licenses. Before the FMP Regulations are published, all VASPs that provided VA services to the Dubai market were required to register with VARA and completely adhere to the regulations. Regulatory action will be taken in the event that this criterion is violated.
