Dubai Takes Steps to Regulate Virtual Assets

Dubai Takes Steps to Regulate Virtual Assets

In line with Dubai’s vision to become a key player in the virtual assets industry, the Government of Dubai issued Law No. 4 of 2022 Regulating Virtual Assets, effective from March 11, 2022. This law introduces the Dubai Virtual Asset Regulatory Authority (VARA) as the body responsible for overseeing all matters related to virtual assets across the Emirate, excluding the Dubai International Financial Center (DIFC). VARA will regulate virtual assets (VAs) such as cryptocurrencies and non-fungible tokens (NFTs), organize VA issuance, authorize service providers, ensure data protection, oversee VA platforms, and monitor transactions to prevent market manipulation. 

 

Under the law, individuals and entities wishing to provide VA services (VASPs) must have their headquarters in Dubai, obtain approvals from VARA, and comply with specific licensing requirements. Prohibited activities without a license include operating VA platforms, providing exchange services, and managing VA portfolios. VASPs are also required to share data with VARA to comply with anti-money laundering regulations. VARA, based at the Dubai World Trade Centre, has already started operations and granted provisional licenses to prominent crypto platforms like Binance and BitOasis while collaborating with international experts to finalize further regulations.