Dubai’s VARA issues new rulebook for crypto regulations

• Dubai government’s crypto regulation authority, VARA, published its 2023 rulebook for regulating cryptocurrency.
• Any entity issuing virtual assets in the Emirate must follow the rules, starting with applying for a license to operate in Dubai.

The government of Dubai’s Virtual Assets Regulatory Authority (VARA) published its 2023 rulebook for regulating cryptocurrency on 8 February.

According to the regulatory authority, any entity in the Emirate that issues virtual assets must follow the rules, starting with applying for a license to operate in Dubai.

The new rules, as per VARA, are intended to attract crypto businesses, protect digital asset dealers and investors, and curtail illegal practices, all in the service of promoting Dubai as a regional and international hub for virtual assets, boosting its competitive edge both locally and globally.

The goal is to establish the Emirate as the future capital of the economy driven by metaverse, AI, Web 3.0, and blockchain, says Helal Saeed Almarri, Director General, of Dubai’s Department of Economy and Tourism and Chairman of VARA’s Executive Board.

VARA, claims Almarri, is the “world’s only independent and specialist regulator” for virtual assets, serving as a catalyst for a truly borderless Digital Economy.

Dubai making steps to become the global blockchain center

Since 2019, Dubai has made inroads into the blockchain space, with the Dubai Department of Economic Development migrating its services to a blockchain-based registry on the Dubai Pulse blockchain platform.

Several blockchain companies, including Binance and the defunct cryptocurrency exchange FTX, had applied for and received licenses to operate within the Emirate.

Binance signed an agreement with the Dubai World Trade Centre Authority in December 2021 to establish a hub that will assist other blockchain-related companies in obtaining a license in Dubai. Coinbase, Huobi, and Kraken also operate in Dubai.

As per the new VARA rulebook, a license can be revoked for a variety of reasons, including material violation of any law, regulation, rule, directive, or insolvency.

VARA also states that the new anti-money laundering (AML) regulations prohibit insider trading, unlawful disclosure, and market manipulation, as well as the financing of terrorism and other unlawful organizations.