- Dubai’s Virtual Asset Regulator Authority (VARA) has rolled out guidelines for Virtual Asset Service Providers (VASP).
- This move marks the oil-rich middle east country’s first regulatory regime for the sector at the federal level.
Dubai’s VARA Rolls Out Guidelines for VASPs
Dubai’s Virtual Asset Regulator Authority (VARA) has rolled out guidelines for Virtual Asset Service Providers (VASPs). The legal framework published on Tuesday primarily aims to protect crypto investors and design much-warranted international standards for industry governance.
The Arabian regulator sets out four compulsory rulebooks that service providers must comply with to offer their services. The “Full Market Product Regulations” include guidelines that lay down the rules for compliance, risk management, market conduct, and other requirements.
Firms must obtain authorization, and relevant licenses, adhere to rulebooks for marketing, advertising, and promotions with hefty fines following any rule break. Violators will be fined between \$5,500 and \$55,000 for breaching these guidelines. If a business repeats the same violation within the year, it could see fines double as high as \$135,000.
The UAE Cabinet introduced the regulatory framework in January and developed an independent regulatory authority for virtual assets and virtual asset service providers. The move is seen as a way to protect investors and ensure the long-term viability of the crypto industry in the UAE.
The guidelines are designed to be comprehensive and cover all aspects of the crypto industry. They include requirements for AML/CFT compliance, risk management, and market conduct. The guidelines also set out rules for marketing and advertising of crypto products and services.
The fines for non-compliance are significant, and the guidelines make it clear that VARA will take a tough stance on violators. This is likely to deter bad actors and help to ensure that the crypto industry in Dubai is well-regulated and safe for investors.
The UAE is seen as a leading jurisdiction for the crypto industry, and the new guidelines are likely to further solidify its position. The guidelines are also likely to be seen as a model for other jurisdictions that are considering regulating the crypto industry.