VARA Crypto Regulation (General Framework in Dubai)

VARA is a unique and customized regulatory framework for virtual assets, created to serve customers and investors in Dubai. In other means, VARA is responsible for crypto regulation in Dubai. Its Full Market Product Regulations have been developed to provide clear guidelines, ensure stability, and reduce market risk. The goal is to create a sustainable and borderless model that utilizes technology in a forward-thinking manner.

The Virtual Assets and Related Activities Regulations 2023 have been established with the aim of advancing certain objectives. These regulations outline the regulatory framework for virtual assets and related activities in Dubai, and provide the Virtual Asset Regulation Authority (VARA) with the powers of general and specific supervision and enforcement.

How to Issue Crypto Assets in Dubai? Crypto Regulation in Dubai

Any business entity in Dubai that issues crypto assets must adhere to the Virtual Asset Issuance Rulebook. However, the issuance and all associated activities of anonymity-enhanced cryptocurrencies are not allowed within Dubai.

No business or individual may engage in any virtual asset activity or promote, offer, or claim to do so in Dubai unless they are: 

1. Approved and licensed by VARA for the virtual asset activity; 
2. An employee performing or assisting in the virtual asset activity on behalf of an employer that is licensed by VARA; or 
3. An exempt entity. (UAE Government Entities; and all public, non-profit, not-for-profit and charitable Entities of an UAE Government Entity.)

A detail research can be found in the link.

Crypto Licence Requirements in Dubai

1. Obligation to Obtain a License 
   1. Any entity wishing to conduct virtual asset activities in Dubai must first seek approval from VARA. VARA is responsible crypto regulation in Dubai.
   2. All entities must apply for, receive, and maintain a license from VARA in order to be permitted to conduct any virtual asset activities in Dubai.
2. Licensing Procedure. Entities applying for a license from VARA must follow the licensing process outlined by VARA.
3. Compliance with Licensing Conditions. Virtual asset service providers must comply with any licensing conditions communicated by VARA, including compliance with all regulations, rules, and directives.
4. Activities Outside of Dubai. If a virtual asset service provider conducts licensed virtual asset activities outside of Dubai, they must comply with all regulations, rules, and directives for that jurisdiction at a minimum.

Mandatory registration for large proprietary traders

A mandatory registration is required for large proprietary traders in Dubai. Any entity that invests its own portfolio in virtual assets with a value of USD 250 million or more over any rolling 30-day period must register with the Virtual Asset Regulation Authority (VARA) before investing or within three working days of having invested. However, this registration does not provide authorization or a license for the entity to conduct any virtual asset activities in Dubai. Additionally, an entity that invests its own portfolio is not permitted to accept or trade virtual assets belonging to another entity.

Virtual Asset Service Providers must comply at all times with the following Rulebooks

1. Company Rulebook;
2. Compliance and Risk Management Rulebook;
3. Technology and Information Rulebook; and
4. Market Conduct Rulebook.

Virtual Asset Service Providers must comply at all times with each of the following Rulebooks that correspond to the VA Activity[ies] 

1. Advisory Services Rulebook;
2. Broker-Dealer Services Rulebook;
3. Custody Services Rulebook;
4. Exchange Services Rulebook;
5. Lending and Borrowing Services Rulebook;
6. Payments and Remittances Services Rulebook; and
7. VA Management and Investment Services Rulebook.