Crypto firms must obtain authorization and relevant licenses to operate in Dubai, the jurisdiction's new virtual asset rulebooks say.
The extensive rules published Tuesday detail requirements for companies from cybersecurity norms to compliance and risk-management standards. A separate set of rulebooks address specific activities like issuance, advisory, custody and exchange services.
All activities and firms fall under the supervision of the Virtual Assets Regulatory Authority (VARA), set up last year to oversee the sector as Dubai aims to attract crypto and blockchain companies. Since then VARA published some guidelines for crypto advertising, with plans to publish a comprehensive rulebook by the end of 2022.
"With bespoke rules and guidelines designed to provide clarity, assure certainty, and mitigate market risks, VARA seeks to develop a model framework for global economic sustainability within an innovation-centric environment that is truly borderless, technology agnostic, and future-focused," the regulator said on Tuesday.
Dubai is the most populous emirate of the seven that make up the United Arab Emirates (UAE) and nurtures big ambitions to become a regional fintech hub. Although a number of crypto companies – including the European unit of now-collapsed FTX – have claimed to have obtained VARA approval, a UAE lawmaker told a panel at the 2023 World Economic Forum in January that no companies have licenses from the watchdog.
Regulators around the world are racing to set up crypto supervision after last year's market crash saw the collapse of high profile digital asset exchange and lending platforms. The European Union is ready to approve its own licensing regime, while the U.K., South Korea and other jurisdictions are quickly forming their own frameworks.
Dubai's new framework, which also covers advertising and promotion requirements for crypto firms, was approved by the VARA board of directors before publication.
CORRECTION (Feb. 13, 18:33 UTC): Clarifies in last paragraph that the framework has been approved by the VARA board of directors.
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