With the exception of individuals who fall under the jurisdiction of the Dubai International Financial Centre, the laws apply to all market players inside the Emirate of Dubai.
New regulations for virtual asset service providers (VASPs) operating in the emirate have been released by the Virtual Asset Regulatory Authority (VARA), the authority in charge of supervising cryptocurrency rules in Dubai.
Irina Heaver, a lawyer specializing in blockchain and cryptocurrencies who practices in the United Arab Emirates, claims that VARA has released its "Full Market Product Regulations," which contain four mandatory rulebooks and activity-specific rulebooks that specify the guidelines for running VASPs. The Dubai International Financial Centre (DIFC), a free zone with its own regulator, is not included in the rules' scope; instead, the regulations only apply to market participants operating within Dubai.
The Dubai regulator also emphasized that rules for marketing, advertising, and promotions must be followed by all market participants, regardless of whether they have a license from VARA or not. The fine for a first-time offender will be 20,000 dirhams ($5,500) and the maximum fine for repeat offenders will be 200,000 dirhams ($55,000).
The regulations provide guidance on a variety of other topics, including the creation of virtual assets. Heaver cites a number of key points from the latest VARA update, including the fact that Dubai forbids the issuance of privacy coins and that dealers with trading capital above $250 million must register with VARA.
The regulation also establishes fees for advice services, broker-dealer registration, and annual supervision for custody services. Depending on the services, the costs range from 40,000 dirhams ($11,000) to 200,000 dirhams ($55,000).
Heaver continued by saying that while VARA is given considerable latitude to interpret and apply the rules as it sees fit, she believes and trusts that such interpretation and application will be done in accordance with "the spirit of Dubai's leadership," which takes fostering entrepreneurship and business acumen into account.
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