Dubai’s Watchdog of Financials Lays down Fresh Guidelines for Crypto Entities

Dubai is a land of attraction not just for people but also for businesses. Since it is a ‘tax free zone’, a large number of worldwide businesses have a desire to move into Dubai.

One of the businesses, which was quite keen in moving into Dubai is crypto. This fact was also known to the Government in Dubai and Dubai’s regulators.

In this background, Virtual Assets Regulatory Authority of Dubai (VARA) had made a promise with crypto entities in November 2022.

This promise is nearing its fulfillment as VARA has issued fresh set of rules and guidelines concerning crypto entities.

Through these guidelines, VARA has laid down requirements which are to be fulfilled by crypto entities desirous of operating in Dubai.

One of the requirements, which has been made compulsory, is the obtaining of operating and other licenses by the interested crypto entities.

Without meeting this compulsory requirement, not a single crypto entity would be allowed to establish in Dubai, clarified VARA.

Announcement of VARA’s Crypto Entities’ Guidelines

VARA made a public statement in which it revealed laying down of rules and guidelines exclusively for crypto companies.

It was informed by VARA that the guidelines covers all aspects of crypto activities including security, disclosures, risk management, transparency and compliance.

It further told that separate guidelines also have been issued which relate to activities of exchange services, issuance, distribution, custody and advisory.

VARA’s Jurisdiction

When Government in Dubai showed its intention of allowing crypto industry to expand into Dubai, it necessitated creation of a separate entity.

Resultantly, VARA came into being last year and was entrusted with the responsibility of monitoring/supervising digital asset industry as its exclusive watchdog.

After its creation, the first set of guidelines issued by VARA were with regard to advertisements concerning crypto and blockchain promotions.

However, VARA further clarified that such rules were issued as an interim setup and that comprehensive rulebook shall follow later.

Examination of freshly issued VARA guidelines shows that VARA has intended to minimize the risks while also ensuring transparency and clarity.

VARA’s is hoping that its crypto framework would be able to attract ‘sustainability’ in the global economy without affecting innovation-focused framework.

Crypto watchdog stated on Tuesday that crypto and blockchain are future technologies and cannot be confined into borderlines.

Dubai Enter the Marathon of Becoming Global Crypto and Blockchain Hub

UAE consists of seven states in the region and Dubai is the top state in all prospects. Like UK, Singapore, Hong Kong and Switzerland, Dubai also is desirous of becoming the global hub for crypto and blockchain.

In fact, UK was officially named as ‘Crypto and Blockchain Global Hub’ for the year 2022.

However, to date, VARA has not allowed any crypto entity to enter the market and offer its services.

A news report claimed that Binance and FTX were granted VARA permissions yet the news was found to be false and misleading.

It was later clarified by VARA that it never issued any license or granted permission to any firm, let alone Binance or FTX.

Furthermore, VARA has only recently issued its guidelines with regard to crypto entities in which obtaining of licenses has been made compulsory.

This means that VARA would now be accommodating crypto firms in obtaining licenses if they are interested in Dubai market.