H.H. Sheikh Mohammed announces new law to regulate virtual assets

Supplied

Dubai has approved a new law to regulate virtual assets.

The announcement was made by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

He said an independent regulatory body called the Dubai Virtual Asset Regulatory Authority (VARA) will oversee the implementation of the law in line with the best international practices. 

The provisions of the law are applicable throughout the Emirate, including special development zones and free zones, with the exception of the Dubai International Financial Centre (DIFC).

The VARA has legal personality and financial autonomy and will be linked to the Dubai World Trade Centre Authority.

The Dubai Virtual Asset Regulatory Authority (VARA) will be responsible for licensing and regulating the sector across Dubai Mainland and Free Zone territories (exclusive of DIFC).

According to the law, it is prohibited for any person in the Emirate to engage in activities without VARA authorization.

The person wishing to practice any of the virtual assets' activities must establish a presence in Dubai to conduct business.

The law defines the activities subject to VARA authorization 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 (6) six months, cancel the permit, and coordinate with the competent commercial licensing authority in the Emirate to cancel the commercial licence.

More from Business News