Syed Imran Haider 
The Dubai-based Virtual Asset Regulatory Authority has recently unveiled a comprehensive set of guidelines for virtual asset service providers operating within the emirate.
Irina Heaver, a well-known crypto and blockchain attorney in the United Arab Emirates, has confirmed that VARA has published the Full Market Product Regulations which comprise of four mandatory rulebooks that outline the operating rules for VASPs.
It’s important to note that these regulations will only be applicable to the market participants present in Dubai. This excludes any individual operating under Dubai’s International Financial Centre, which is a self-regulated free zone.
Will 2023 be the Year for Regulations in the Crypto Landscape?
As the crypto industry continues to mature, 2023 may very well be the year of crypto regulations with nations worldwide developing specific guidelines for this asset class.
The growing recognition of the potential of blockchain technology is encouraging governments to establish regulations that foster innovation. Dubai, a hub for all things crypto and blockchain, is leading the way with its newly released rulebooks for crypto regulations.
The Virtual Assets Regulatory Authority has ambitious plans to establish Dubai as a preeminent regional and global center for crypto as well as blockchain technology.
By introducing these regulations, VARA is setting the stage for Dubai to become the go-to destination for businesses and individuals seeking to participate in the rapidly evolving world of crypto.
Paying Emphasis on Compliance With the Regulations
The Dubai regulator emphasized that all market participants, regardless of whether they hold a VARA license or not, must comply with the regulations governing marketing, advertising, and promotions.
Failure to do so could result in hefty fines, ranging from 20,000 dirhams to 200,000 dirhams, and repeat violators may face even more substantial penalties, with fines reaching up to a maximum of 500,000 dirhams.
These regulations and penalties aim to ensure that all market participants operate in an ethical and transparent manner, promoting trust and stability within the crypto industry in Dubai.
In addition to the advertising and promotion regulations, VARA’s new guidelines also provide direction on various other matters, such as the issuance of virtual assets. Crypto lawyer, Irina Heaver pointed out several key aspects of the VARA update.
This included the prohibition of privacy coins in Dubai and the requirement for traders with a trading capital exceeding $250 million to register with VARA.
The regulations also outline the fees for advisory services, licensing, and annual supervision for a range of services, including custody services, broker-dealers, exchanges and lending services. These fees vary from 40,000 dirhams to 200,000 dirhams, depending on the type of service provided.
These regulations and fees are intended to ensure the continued growth and development of the crypto industry in Dubai, while also promoting transparency and accountability.
Fostering an Environment of Growth and Entrepreneurship
It’s important to note that VARA has significant discretion in interpreting and enforcing the regulations. However, Irina Heaver is confident that VARA will exercise its authority in accordance with the vision of Dubai’s leaders, who prioritize fostering entrepreneurship and supporting business growth.
The approach taken by VARA will reflect the spirit of Dubai’s leadership and their commitment to creating a supportive and dynamic business environment for the crypto industry.
It is also worth keeping in mind that there are separate rulebooks specific to certain types of activities. The extensive rulebook from VARA serves to provide virtual asset service providers with a comprehensive framework of regulations.
All of these regulations are tailored to their particular operations and business models. This approach ensures that VASPs have clear guidelines and expectations for conducting business in Dubai, promoting a stable and predictable regulatory environment for the crypto industry.
Final Thoughts
Many crypto analysts have been predicting that this could be the year where crypto regulations become tighter across the globe and this step by Dubai’s virtual asset regulatory authority shows that things could very well be headed towards that direction.
