Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE, and the Ruler of Dubai, has issued the Dubai Virtual Assets Regulation Law.
The law will create an advanced legal framework to protect investors and design international standards to govern the virtual asset (VA) industry in order to promote responsible business growth under prudent regulations.
The provisions of the law will be applicable throughout Dubai, except for the Dubai International Financial Centre (DIFC), but will include within its jurisdiction the special development zones and free zones.
Under the law, the Dubai Virtual Asset Regulatory Authority (VARA) will also be established. The authority will have legal personality and financial autonomy and will be linked to the Dubai World Trade Centre Authority (DWTCA).
The Dubai Virtual Asset Regulatory Authority will be responsible for licensing and regulating the sector across Dubai Mainland and Free Zone territories (DIFC), the state-run news agency, Wam, reported.
Envisioned to anchor the world’s virtual assets market leaders, credible institutional enablers, and innovation facilitators, the Dubai Virtual Asset Regulatory Authority will serve as the central custodial authority for this specialised industry.
The law, which comes into force from the date of its publication in the Official Gazette, defines the tasks and competencies of the VARA authority, which will be considered as the competent body to regulate, supervise, and control virtual asset services.
The law also stipulates that the authority is mandated with organising and setting the rules and controls that govern the conduct of virtual assets activities, including management, clearing, and settlement services, in addition to classifying and specifying types of virtual assets.
Details of the Dubai Virtual Assets Regulation Law
According to the law, it is prohibited for any person in the emirate to engage in activities without VARA authorisation. The person wishing to practice any of the virtual assets activities must establish a presence in Dubai to conduct a business.
The law defines the activities subject to VARA authorisation as follows:
- Operating and managing virtual assets platforms services
- Exchange services between virtual assets and currencies, whether national or foreign exchange services between one or more forms of virtual assets
- Virtual asset transfer services
- Virtual asset custody and management services
- Services related to the virtual asset portfolio
- Services related to the offering and trading of virtual tokens
- The acts that constitute a violation of the provisions of this law and its related decisions, and the fines imposed on a violator, shall be determined by a decision issued by the board of directors of the Dubai World Trade Centre
- In addition to the penalty of a fine, the VARA may take any of the following measures against the violator: to suspend the permit for a period not exceeding six months, cancel the permit, and coordinate with the competent commercial licensing authority in Dubai to cancel the commercial license
The establishment of the Dubai Virtual Asset Regulatory Authority is also in line with the strategy of the Dubai Securities and Exchange Higher Committee.
Sheikh Mohammed bin Rashid said: “Today, we are designing the future of virtual assets globally.”
The Dubai Ruler added that the emirate possesses all the capabilities that qualify it to be one of the most important global centres in the field of virtual assets, especially with an advanced legislative environment.
“Dubai will provide the most advanced virtual asset ecosystem in terms of organisation, governance and security,” Sheikh Mohammed bin Rashid said.
“Approving the virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority is a vital step that establishes the UAE’s position in this sector a step that aims to help the sector to grow and protect investors.”
The director-general of the DWTCA, Helal Saeed Al Marri (above), said that the new law and establishing the authority will enhance the UAE and Dubai’s position in the virtual assets sector and attract virtual assets leaders from around the world.
Al Marri added that Dubai Virtual Asset Regulatory Authority will provide a full range of virtual assets services in coordination with the Central Bank of the UAE and the Securities and Commodities Authority.
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