VARA Launches Full Market Product Regulations
Last week, the Virtual Asset Regulatory Authority (VARA) released the Virtual Assets and Related Activities Regulations 2023. They reflect the recent issuance of Cabinet Decision No. (111) of 2022 which prohibits any person to engage or deal in virtual asset activities in the UAE (excluding ADGM and DIFC) without obtaining the necessary approval and a licence from the UAE Securities and Commodities Authority or a local licensing authority.
The Regulations form part of the wider drive for Dubai to become a focal point in the emerging economy for the metaverse, artificial intelligence and blockchain.
The new Regulations cover seven licensed virtual asset activities, including advisory, broker-dealer, custodial, exchange, lending-borrowing, payments and remittance, and VA management and investment services and set out a framework which seeks to mitigate money laundering and terrorist financing risks arising from the use of new technologies in the market.
All UAE-based Virtual Asset Service-Providers will be required to register with the VARA prior to the publication of the FMP Regulations and fully comply with the specified licensing route; failure to do so shall result in regulatory action and penalties.
The Regulations also set fees for advisory services, licensing, and annual supervision for custody, exchanges, broker-dealers and lending services which range from 40,000 to 200,000 dirhams.
This summary was co-authored by Rachel Stanley, Trainee Solicitor.