Dubai Sets Deadline for Virtual Asset Operators to Become Regulated Under Vara

Dubai’s Virtual Assets Regulatory Authority (Vara) has set a deadline for virtual asset operators seeking to be regulated under its authority. The Department of Economy and Tourism and the Dubai Free Zones Council will begin accepting applications from legacy virtual asset operators to become fully regulated under Vara.

Operators carrying out virtual asset activities in Dubai, except those in the Dubai International Financial Centre, must complete and submit initial disclosure questionnaires to their respective licensing authorities by April 30. Upon receipt of an application acknowledgement notice, virtual asset service providers will begin becoming regulated under Vara by August 31. The migration of the market to a regulated regime is the first step (source United Arab Emirates : Dubai’s VARA sets regulations deadline for virtual assets operators. (2023, April 18). MENA Report.)

Vara offers seven types of regulated virtual asset activity licences: advisory services, broker-dealer services, custody services, exchange services, lending and borrowing services, transfer and settlement services, and management and investment services. The Cabinet Resolution No 111 of 2022, concerning the regulation of virtual assets and their service providers, requires all companies operating in or seeking to operate in this sector in or from Dubai to be licensed by Vara (source: The National).

Dubai aims to establish itself as the capital of the future economy by focusing on emerging technology such as the metaverse, artificial intelligence, Web3, and blockchain. Vara’s establishment under the Dubai Virtual Asset Regulation Law in March 2022 is part of this effort. Vara aims to create an advanced legal framework to protect investors and provide international standards for virtual asset industry governance to enable responsible business growth in the emirate. The regulatory framework is focused on the risks that each virtual asset activity presents to the market and seeks to offer service providers a clear framework of rules which apply to their operations and business models (source: The National).

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