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His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. Image Credit: Twitter/HHShkMohd

Dubai: His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has approved the first ever law on regulating virtual assets.

The law was launched with an aim to make Dubai a key player in designing the future of virtual assets and promote responsible business growth.

Sheikh Mohammed confirmed that Dubai will be a key player in designing the future of virtual assets in the world: "Today we are participating in designing the future of virtual asset globally."

Sheikh Mohammed stressed that Dubai possesses all the capabilities that qualify it to be one of the most important global centers in the field of virtual assets, especially the advanced legislative environment. He said, "Dubai will provide the most advanced virtual asset ecosystem in terms of organisation, governance and security.”

“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.”

Dubai Virtual Assets Regulatory Authority (VARA)

The Dubai Virtual Assets Regulatory Authority, an affiliate of the Dubai World Trade Centre, will oversee and monitor regulations and disclosures.

The Authority will regulate and supervise the future growth of virtual assets in the emirate. It will also issue licences to virtual asset service providers, and protect personal data of beneficiaries.

Activities subject to VARA authorisation are:

  • 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 law also stipulates that the authority is mandated with organising and setting the rules and controls that govern the conduct of virtual asset activities. This includes management services, clearing and settlement services, in addition to classifying and specifying types of virtual assets.

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

Virtual asset
Image Credit: Twitter/@HHShkMohd

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

Violation of this law could result in:

  • Penalty of a fine;
  • Suspension of the permit for a period not exceeding six months;
  • Cancellation of the permit; and
  • Cancellation of the commercial license.

Helal Saeed Al Marri, Director General of DWTCA said that the new law and establishing the Authority will enhance the UAE and Dubai’s position in the virtual asset sector and attract leaders from all over the world. Al Marri added that Dubai Virtual Asset Regulatory Authority will provide a full range of VA services in coordination with the Central Bank of the UAE and the Securities and Commodities Authority.