TL:DR
- Dubai’s Virtual Assets Regulatory Authority (VARA) has released its 2023 rulebook for regulating cryptocurrency.
- The new rules aim to attract crypto businesses, protect digital asset dealers and investors, and curb illegal practices.
- The rulebook requires entities wishing to do business with cryptocurrency to seek authorization and receive a license from VARA before offering their services, with penalties for violating the rules including fines, civil penalties, and enforcement actions against responsible individuals.
Dubai Sets Rules for Cryptocurrency Companies to Boost its Financial Tech Center Status
Dubai’s Virtual Assets Regulatory Authority (VARA) has just released its 2023 rulebook for regulating cryptocurrency, with the goal of attracting crypto businesses and investors to the Emirate. According to the rulebook, any entity in Dubai that issues virtual assets must comply with the regulations and apply for a license to operate in Dubai. This move demonstrates Dubai’s commitment to becoming a regional and international hub for virtual assets and boosting its competitive edge in both local and international markets.
Helal Saeed Almarri, Director General of Dubai’s Department of Economy & Tourism and Chairman of VARA’s Executive Board, said in a statement that the mission is “to establish the Emirate as the capital of the future economy anchored by metaverse, AI, Web3.0 and blockchain.” The new rules are meant to protect digital asset dealers and investors and curb illegal practices, while fostering a progressive virtual asset ecosystem that nurtures next-generation innovation.
Dubai has been making strides in the blockchain space since 2019, with several blockchain companies applying for and gaining licenses to operate within the Emirate, including Binance and FTX. The rulebook requires entities wishing to do business with cryptocurrency to seek authorization and receive a license from VARA before offering their services, with the possibility of having their license revoked for material violation of any law, regulation, rule, or directive, insolvency, being subject to insolvency proceedings, or failure to pay a judgment by a court.
VARA has also clarified the regulations regarding money laundering, which include the financing of terrorism and other unlawful organizations and prohibits insider dealing, unlawful disclosure, and market manipulation. The rulebook includes some exemptions, such as a professional exemption for practicing lawyers, accountants, and business consultants that carry out virtual asset activities that are wholly incidental to their professional practice.
In conclusion, the new rulebook from VARA aims to attract crypto businesses and investors to Dubai while promoting the Emirate as a financial technology center. The rules serve to protect digital asset dealers and investors and curb illegal practices, creating a more progressive virtual asset ecosystem for innovation.
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