Regulator Virtual Asset Regulatory Authority (VARA) responsible for supervision Dubai’s cryptocurrency laws have issued new guidelines for virtual asset service providers (VASPs) operating in the emirate.
According to a message sent by Irina Heaver, a cryptocurrency and blockchain lawyer in the United Arab Emirates, VARA has published “market-wide product regulations” that include four mandatory rulebooks and event-specific rulebooks that regulate the operating Rules for VASPs. These rules apply only to market participants within Dubai, with the exception of market participants operating under the Dubai International Financial Center (DIFC), a free zone with its own regulator.
In addition to the rulebook, the Dubai regulator has stressed that all market players, whether licensed or not under VARA, must comply with marketing, advertising and promotion regulations. Violators will be fined US$5,500 (AED20,000) to US$55,000 (AED200,000), and repeat offenders will be fined up to US$135,000 (AED500,000).
Apart from this, the regulation also provides guidance on other matters, such as the issuance of virtual assets. According to Heaver, there are several takeaways from the new VARA update. These include a ban on the issuance of privacy coins in Dubai, and the requirement for traders with trading capital of more than $250 million to register with VARA.
The regulations also set out advisory services, licensing and annual regulatory fees for custody, exchanges, broker-dealers and loan servicing. Fees range from US$11,000 (AED40,000) to US$55,000 (AED200,000), depending on the service.
related: Lawyers Explain United Arab Emirates’ New Federal Virtual Assets Law
Commenting on the new development, Heaver told Cointelegraph that it is a good thing that VARA provides clarity to the crypto space. She explained:
“Regulatory certainty is very good for business, good for consumers, investors and the Emirate of Dubai. These regulations have been long awaited and mostly welcomed.”
Heaver also added that while VARA has broad powers to interpret regulations and apply them as they see fit, she trusts and believes that this interpretation and application will be done in accordance with the “spirit of Dubai’s leadership” which sees fostering business mind and entrepreneurship.