Page 106 - SAMENA Trends - January-February 2023

REGULATORY & POLICY UPDATES SAMENA TRENDS

Dubai’s VARA Issues Specialized Regulations for Virtual Assets

Dubai’s Virtual Asset Regulatory Authority
(VARA), has issued its Virtual Assets and
Related Activities Regulations 2023 setting
out a broad Virtual Asset (VA) Framework
stressing economic sustainability and
cross-border financial security. The UAE
has remained committed to enabling these
drivers safely, updating its oversight and
regulatory approach, addressing global
risks of money laundering (ML) and terrorist
financing (TF), arising from the potential
misuse of new technologies. The VA
Framework is structurally designed to offer
regulatory certainty – allowing the market
to have greater clarity on the expected
level of operator responsibility. It also
mandates gold-standard risk assurance
and Anti-Money Laundering (AML)
standards to be applied by licensed entities
within the Emirate. Helal Saeed Almarri,
Director General Dubai’s Department of
Economy & Tourism, and Chairman of
VARA’s Executive Board said: “Dubai’s D33
Economic Plan has outlined our mission to
establish the Emirate as the capital of the
Future Economy anchored by Metaverse,
AI, Web3.0 and Blockchain. In Q1-2022,
VARA was launched as the world's only
independent and specialist regulator for
Virtual Assets to serve as the accelerator for
a truly borderless Digital Economy. “Ahead
of its first anniversary since establishment,
VARA launches the first-of-its-kind VA
framework structured to accelerate our
New Economy agenda, augmenting secure,
and sustainable ‘global’ market growth.
This custom-designed construct reflects
UAE’s commitment to building responsible
safeguards, and Dubai’s confidence in
delivering a progressive VA ecosystem
that nurtures next-gen innovation.” As
the Authority mandated to provide VA
oversight across the Emirate of Dubai
[except DIFC], VARA will facilitate VA-
associated economic stability, investor issuance is a regulated activity under the new market entrants will be provided with
protection, and jurisdictional resilience. VARA regime to allow consumers to make a route towards full FMP licensing. All
The new regulations span a comprehensive a more informed decision on new tokens VASPs offering VA services to the Dubai
breadth of seven licensed VA activities - being launched in Dubai, and the associated market prior to the publication of the FMP
Advisory services, Broker-Dealer services, obligations of the issuer. Existing MVP Regulations will be required to register with
Custodial services, Exchange services, Operational license applicants [and holders VARA and become fully compliant with the
Lending-Borrowing services, Payments and of either the Provisional or Preparatory final rules. Any breach of this condition will
Remittances services, and VA Management MVP licenses], legacy UAE-based Virtual be subject to regulatory action.
and Investment services. Additionally, Asset Service-Providers (VASPs), and

106 JANUARY-FEBRUARY 2023