UAE became the first country in the world to establish a legal body to regulate the virtual assets and help expats to acquire Cryptocurrency business license in UAE. Following this, Dubai is one of the world’s most popular tourist destinations, and its leaders are looking to capitalize on that popularity by making it a top destination for those who want to see the future of finance.
Law No. 4 of 2022, concerning the Regulation of Virtual Assets in the Emirate of Dubai intends to build the much-needed international standards for virtual asset (VA) industry governance to promote responsible company growth, under stringent rules, and to create an advanced legal framework to protect investors. The law is in force across the emirate, including special development zones and free zones, except for Dubai International Financial Centre.
An insight on VARA (Virtual Assets Regulatory Authority)
With billions of clients across the Middle East, Africa, and South Asia (MEASA), Dubai takes pride in being a forward-thinking market that welcomes the use of cutting-edge technology and innovation. Due to the development of Dubai’s inventive start-up ecosystem, the maturity of the country’s fin-tech sector, the introduction of crypto currencies, NFTs is witnessing a new dawn.
Dubai will now have its own virtual asset regulatory authority, which aims to promote it’s position as a regional and international destination in the virtual assets sphere. VARA further seeks to enhance investment awareness of the virtual assets sector, issue cryptocurrency business license in UAE, attract investment and companies operating in the field of virtual assets to establish themselves in Dubai and provide the regulations, rules, and standards necessary to regulate, supervise, and control all matters related to virtual assets.
What are the key features of VARA?
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VARA was established to regulate and oversee the issuance, offering, and relevant disclosure processes of virtual assets and NFTs. VARA is affiliated with Dubai World Trade Centre Authority (DWTC).
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VARA is responsible for monitoring trading activities in virtual asset services to prevent price manipulation and establish high standards of protection for beneficiaries’ personal data.
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Any entity offering virtual asset services can only do so if granted a license from VARA, and must be operating in the Dubai and have a trade license from the relevant commercial authority in Emirate of Dubai.
What activities will VARA undertake?
Activities listed below require authorization from VARA-
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Running and maintaining platforms for virtual assets.
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Exchange services between virtual assets and money, whether local or foreign; and exchange services between one or more types of virtual assets.
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Services for transferring virtual assets.
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Services for the custody and management of virtual assets services for the portfolio of virtual assets services for the sale and exchange of virtual tokens.
What about the possible penalties?
VARA will also have the authority to either suspend the Cryptocurrency license in UAE for a period of up to six months, revoke the authorization, or coordinate with the competent commercial licensing authority in Dubai to cancel the commercial license of violators. The potential sanctions for violation of VA may, therefore, be significant and have wide-ranging repercussions.
Conclusion
A virtual asset is a cutting-edge technology that represents value and maybe traded, transferred, saved, or used as a payment method in digital form. Virtual assets include bitcoin, crypto assets, and non-fungible tokens (NFTs).
VARA plans to control the guiding principles of the services, issue cryptocurrency business license in UAE, and activities rather than the constantly changing products and application frameworks, since it was created to provide a secure and progressive operating framework for the virtual asset (VA) industry to be able to scale.
The United Arab Emirates has taken pioneering steps to establish laws and regulations which will allow the industry to grow immensely within the regulatory framework.
