Dubai Passes First-of-its-kind Law To Regulate Crypto And NFTs
In a major step towards becoming the global crypto hub, Dubai yesterday passed a 'first of its kind' law to regulate virtual assets, cryptocurrency and NFTs.
Nearly a month after announcing plans to issue crypto licenses, UAE has taken another step towards becoming a global crypto hub.
Yesterday, a first-of-its-kind law to regulate virtual assets was passed by Ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum, who is also the Vice President and Prime Minister of UAE.
Taking to Twitter, he said, ¡°The future belongs to those who design it. Through the virtual asset law, we aspire to participate in shaping the future of this ever-evolving sector", as per a report in KhaleejTimes.
Today, we approved the virtual assets law and established the Dubai Virtual Assets Regulatory Authority. A step that establishes the UAE¡¯s position in this sector. The Authority will cooperate with all related entities to ensure maximum transparency and security for investors. pic.twitter.com/LuNtuIW8FM
¡ª HH Sheikh Mohammed (@HHShkMohd) March 9, 2022
Sheikh Mohammed noted that the law presents a vital step that aims to advance the digital sector and protect the rights of investors, adding that "Dubai will provide the most advanced virtual asset ecosystem in terms of organization, governance and security.¡±
Reuters
The Dubai Virtual Asset Regulation Law
The virtual assets law shall apply to special development zones and free zones throughout the Emirate, with the exception of the Dubai International Financial Centre, as per Khaleej Times.
It presents an advanced legal framework to protect investors and promote responsible business growth within a virtual asset (VA) Industry governance that implements the highest international standards.
Establishment Of The Dubai Virtual Assets Regulatory Authority
The Ruler of Dubai also announced the establishment of Dubai VARA (Virtual Assets Regulatory Authority). The independent authority, established under Dubai World Trade Center Authority, will oversee the regulation, licensing and governance of virtual assets, non-fungible tokens (NFTs), and cryptocurrencies.
It will also be responsible for licensing and regulating the sector across Dubai Mainland and Free Zone territories (exclusive of DIFC).
Details About The Law & VARA
1. Under the law, it is prohibited for any person in the Emirate to engage in activities without Dubai VARA authorization as the competent body in the Emirate to regulate, supervise and control virtual asset services.
2. People wishing to practice any of the VA activities must establish a presence in Dubai to conduct business.
3. VARA's main responsibilities include: Organizing issuance and trading of virtual assets and tokens, organizing and authorizing virtual asset service providers, ensuring the highest standards of protection for beneficiaries¡¯ personal data, organizing the operation of virtual asset platforms and portfolios, and monitoring transactions and prevent virtual assets price manipulation.
4. Activities subject to VARA authorization and control include virtual asset transfer and management services, exchange services between virtual assets ad currencies, operating and managing virtual assets platforms, exchange services between one or more forms of virtual assets, and virtual assets custody and management services.
5. Also, the acts that constitute a violation of the provisions of this virtual asset law and its related decisions, and the fines imposed on a violator, would be determined by a decision issued by the board of directors of the Dubai World Trade Centre.
Besides the imposition of a fine, Dubai VARA may suspend the permit for a period not exceeding 6 months, cancel the permit, and coordinate with the competent commercial licensing authority in the Emirate to cancel the commercial license.
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