The Virtual Assets Regulatory Authority (VARA), the regulator tasked with overseeing cryptocurrency laws in Dubai, has released new guidelines for virtual asset service providers (VASPs) operating in the emirate.
According to information submitted by Irina Heaver, a UAE-based blockchain and cryptocurrency lawyer, the VARA has issued the “Comprehensive Market Product Regulations” which include four mandatory rulebooks and activity-specific rulebooks that set out the rules for operating VASPs. The rules apply only to market participants within Dubai, with the exception of those operating in the Dubai International Financial Center (DIFC), a free zone with its own regulator.
⚠️DubaiNews
Dubai’s Virtual Assets and Regulatory Authority issued the long-awaited Full Market Regulations for Virtual Assets Services Providers (VASPs).
—Irina₿. Heaver (@IrinaHeaver) February 7, 2023
In addition to the regulations, the Dubai regulator also stressed that all market participants, whether they have a VARA license or not, must comply with regulations on marketing, advertising and promotions. LViolators will be fined between USD 5,500 (20,000 UAE dirhams) and USD 55,000 (200,000 dirhams), and repeat offenders could be fined up to USD 135,000 (500,000 dirhams).
In addition, the regulations also provide guidance on other matters, such as the issuance of virtual assets. According to Heaver, several things emerge from the new VARA update. For example, private coin issuance is prohibited in Dubai and traders with trading capital greater than USD 250 million are required to register with the VARA.
The regulation also establishes fees for advisory services, licensing and annual supervision for custody, exchanges, broker-dealers and lending services.. Fees can range from USD 11,000 (40,000 dirhams) to USD 55,000 (200,000 dirhams), depending on the services.
Commenting on the new development, Heaver told Cointelegraph that VARA providing clarity for the crypto space is a good thing.. He explained that
“Regulatory certainty is very good for business, it is good for consumers, it is good for investors and it is good for the Emirate of Dubai. The regulations are long overdue and are mostly welcome.”
Heaver also added that while the VARA has broad authority to interpret the rules and apply them as it sees fit, it believes and trusts that such interpretation and application will be done in accordance with “the spirit of leadership of Dubai”, which sees the vision with business and fostering entrepreneurship in mind.
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