UAE is moving towards legalizing cryptocurrencies. As per the new regulations, they will be issuing virtual business licenses in Dubai. Therefore, the government of UAE made this announcement in March.
The Virtual Asset Regulatory Authority of Dubai will be set up at the Dubai World Trade Center Authority. This new body will be in check for all the regulatory decisions. Therefore, they will manage digital currency regulations.
Sheikh Mohammad bin Rashid Al Maktoum, Ruler of Dubai is the Prime Minister and Vice President of UAE. He has passed the law. Hence, he said that passing this law was necessary to protect the rights of the investors. “Dubai will provide the most advanced virtual asset ecosystem in terms of organization, governance, and security,” he said
Tweeting about the new law, he wrote, “Today we approved the virtual assets law and established the Dubai Virtual Assets Regulatory Authority. A step that establishes the UAE’s position in this sector. The Authority will cooperate with all related entities to ensure maximum transparency and security for investors.”
Dubai Virtual Asset Regulation Law
The virtual asset regulation law will be applicable for special development zones and free zones. However, DIFC will however not have the benefit of this law. The Emirates had adopted this law to determine sustainable growth. Thus, they want to keep up with the best industrial standards.
The introduction of this law will be efficient for the business. Furthermore, VARA will be responsible for the regulation and licensing. Therefore, they will license the sectors for free zone territories and mainlands.
What will VARA do?
The main responsibilities of VARA include:
- Limiting the changes in the price of digital assets.
- Managing virtual transactions.
- Regulation of issuing NFTs and digital assets.
- Safeguarding personal data.
- Overseeing the activities across various digital platforms. Therefore, this is mostly regarding digital wallets and currency.
- Providing licenses and regulations to the ones who offer digital assets.
VARA will have to manage a wide range of activities. These usually include:
- Managing the function of digital asset platforms.
- Providing services in regards to trading virtual tokens.
- Offering transfer services of virtual assets.
- Offer services that establish a connection with the virtual asset profile.
- Managing the function across various digital asset platforms.
- Taking care of custody and asset management services.
Any acts that cause violation can lead to the cancellation of the license. Therefore, the violator will have to pay a cancellation fee. Thus, the Board of Directors of Dubai World Trade Center will decide about canceling the license.
Dubai VARA can also collaborate with the relevant license authority. They can provide or cancel the permit or license. Therefore, they may also suspend the permit for up to six months if the company does not follow the regulations.
Crypto Law of Dubai
The virtual asset law of Dubai is changing. Thus, the Dubai Financial Services Authority released the 56-page long law on March 9. The law focuses on digital currency and tokens.
As per the law, no individual in Dubai can use digital tokens without VARA approving them. Therefore, VARA is the only body to check and regulate digital assets. Therefore, if you want to use it, you must consult VARA.
There will be a ban on privacy tokens and algorithmic tokens. Revisions are being made to the law. Therefore, after complete revision, the public can access it.
Can you trade in virtual assets without VARA’s permission in Dubai?
It is important to take permission from VARA before using virtual assets. If you do any activity without permission, you may need to pay a penalty. Therefore, it is important that you establish a presence to do digital asset trade in Dubai.
What penalties do violators pay?
If you do not follow the law, you will need to pay the penalty. The Board of Directors will decide the penalty. Therefore, you may need to pay a fine. However, apart from that, the body may also cancel your permit. These bodies can coordinate with any commercial licensing body. Therefore, they may also cancel your commercial license.
Where can we buy and sell virtual asset?
It is important to check what VARA authorizes. However, you can buy and sell digital assets on different digital platforms. Therefore, some of the popular platforms to use:
- DEX Crypto Exchange
If you want to know more about crypto law in the UAE, get in touch with professionals at BusinessLinkUAE. Therefore, we can guide you through the entire process.