Law No. 4 of 2022 Concerning the Regulation of Virtual Assets in the emirate of Dubai aims to create an advanced legal framework to protect investors and design the much-warranted international standards for virtual asset (VA) industry governance to promote responsible business growth, under prudential regulations. The law is applicable throughout the emirate, including special development zones and free zones, but not Dubai International Financial Centre.
Dubai Virtual Assets Regulatory Authority (VARA)
Dubai Virtual Assets Regulatory Authority (VARA) was set up to achieve the goals of the above law. The authority has a legal personality and financial autonomy and is linked to the Dubai World Trade Centre Authority (DWTCA). VARA will be responsible for licensing and regulating the sector across Dubai’s mainland and the free zone territories (excluding DIFC).
It will provide a full range of services in coordination with Central Bank of the UAE and Securities and Commodities Authority. It is mandated with organising and setting the rules and controls for conducting virtual assets-related activities including management services, clearing and settlement services, in addition to classifying and specifying types of virtual assets.
VARA’s tasks
The following are the tasks of VARA:
- organising issuance and trading of virtual assets and virtual tokens
- organising and authorising virtual asset service providers
- ensuring the highest standards of protection for beneficiaries’ personal data
- organising the operation of virtual assets’ platforms and portfolios
- monitoring transactions and preventing price manipulation of the virtual assets.
VARA’s activities
The following activities are subject to authorisation from VARA:
- operating and managing virtual assets’ platforms services
- exchange services between virtual assets and currencies, whether national or foreign
- exchange services between one or more forms of virtual assets
- virtual assets’ transfer services
- virtual assets’ custody and management services
- services related to the virtual assets’ portfolio
- services related to the offering and trading of virtual tokens.
Read related news coverage on WAM and the website of Dubai Media Office.
Useful links:
- FATF focus on virtual assets - The Financial Action Task Force (FATF)
- Virtual Asset Activities - Abu Dhabi Global Market
- Virtual Assets – Dubai World Trade Centre
Source: UAE government portal