• All entities that qualify for a regulated Full Market Product (FMP) Licence will commence their transition to a VARA regulated regime by August 31, 2023. Image Credit: Omar Bakri

Dubai: Dubai’s Virtual Asset Regulatory Authority (VARA) is ramping up efforts to regulate virtual asset operators in the emirate. Working closely with the Department of Economy and Tourism (DET) and Free Zone Authorities (FZAs), VARA has set an April 30 deadline for initial disclosure questionnaires (IDQs) from all legacy market operators carrying out virtual asset activities in Dubai (excluding DIFC). This marks the first step towards migrating the market to a fully regulated regime, in compliance with Cabinet Resolution No. 111 of 2022.

The resolution, which came into effect on January 15, 2023, requires all companies operating in or seeking to operate in the virtual asset sector in Dubai to be licensed by VARA. To facilitate the transition of existing Virtual Asset Service Providers (VASPs) into the VARA regulatory regime, and formalize the application process for new regulated licenses, VARA has been actively engaged with DET and Dubai’s various FZAs.

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VASPs that have submitted their IDQs and received an Application Acknowledgement Notice (AAN) will commence the appropriate course of action for those requiring to be regulated or registered under VARA by August 31, 2023. Seven distinct types of regulated VA activity licenses can be applied for, including Advisory Services, Broker-Dealer Services, Custody Services, Exchange Services, Lending and Borrowing Services, Transfer and Settlement Services, and Management and Investment Services.

By regulating the virtual asset sector, VARA aims to ensure a level playing field, promote transparency, and protect consumers and investors from potential risks associated with virtual assets. The move is also expected to boost investor confidence and attract more businesses to Dubai’s rapidly growing digital economy.