Afridi & Angell Client Alert
The Virtual Assets Regulatory Authority (VARA), established in March 2022 to regulate all activities relating to virtual assets in Dubai, has issued its much-awaited regulatory framework. So far, VARA was only issuing MVP (minimal viable product) licenses on a select basis. In addition, VARA had, in August 2022, issued its Marketing Regulations governing the marketing activities relating to virtual assets in Dubai.
On 7 February 2023, VARA has issued its full market product regulations and introduced the following regulations applicable to all virtual asset service providers:
1 – Virtual Assets and Related Activities Regulations 2023
2 – Company Rulebook
3 – Compliance & Risk Management Rulebook
4 – Technology & Information Rulebook
In addition, VARA has introduced several activity-specific Rulebooks to cater for risks associated with the provision of each virtual asset activity. These will apply depending on the category of license obtained by the relevant entity:
1 – Advisory Services Rulebook
2 – Broker-Dealer Services Rulebook
4 – Exchange Services Rulebook
5 – Lending & Borrowing Services Rulebook
6 – Payments & Remittances Services Rulebook
7 – Management & Investment Services Rulebook
VARA has also issued a VA Issuance Rulebook which provides for registration requirements for issuing permitted virtual assets and approval requirements for issue of any other virtual assets.
Pursuant to the new regulations, all entities seeking a license from VARA have to adhere to the licensing process as prescribed by VARA from time to time, which shall include compliance with the VARA regulations. The licensing procedure and application forms are awaited. ■