The Virtual Asset Regulatory Authority (VARA) in Dubai has taken a big step in regulating the cryptocurrency space within the emirate by issuing new guidelines for virtual asset service providers (VASP). The new regulations, known as the “Full Market Product Regulations,” include four compulsory rulebooks and activity-specific rulebooks that outline the rules for operating VASPs. These regulations aim to provide clarity and protection for consumers, investors, and businesses involved in the crypto space in Dubai.
Irina Heaver, a crypto and blockchain lawyer based in the UAE, spoke positively about the new regulations. “Regulatory certainty is very good for business, it is good for consumers, investors, and for the Emirate of Dubai. The regulations are long-awaited and mostly welcomed,” she said. Heaver added that VARA has a wide authority to interpret the regulations, but she trusts that such interpretation will be done in line with “the spirit of Dubai’s leadership,” which takes into consideration the promotion of business acumen and entrepreneurship.
Dubai NewsDubai's Vurtual Assets and Regulatory Authority issued the long-awaited Full Market Regulations for Vurtual Assets Services Providers (VASPs).
— Irina ₿. Heaver (@IrinaHeaver) February 7, 2023
The regulations also provide guidance on the issuance of virtual assets and prohibit the issuance of privacy coins. Traders with trading capital above $250 million are required to register with VARA. The fees for advisory services, licensing, and annual supervision for custody, exchanges, broker-dealers, and lending services range from $11,000 to $55,000.
In addition to the new guidelines for VASPs, the Dubai regulator also highlighted that all market participants, whether they are licensed by VARA or not, must adhere to regulations for marketing, advertising, and promotions. Violators of these regulations will face fines between $5,500 and $55,000, with repeat offenders potentially facing a fine of up to $135,000.
This move by Dubai to regulate the cryptocurrency space is a significant step forward in the adoption and mainstream usage of digital assets. The comprehensive nature of the regulations provides clarity for businesses and investors and ensures that the crypto space operates in a safe and transparent manner.
The regulations also provide a level of protection for consumers and investors. The prohibition of privacy coins and the requirement for traders with high trading capital to register with VARA ensure that there is accountability and transparency in the crypto space.
Dubai has a reputation for being at the forefront of innovation and technology, and these new regulations further solidify the emirate’s position as a leader in the crypto space. By providing a regulatory framework, Dubai is sending a message to the world that it is open to the adoption and usage of digital assets while also ensuring that they are used in a safe and responsible manner.
Furthermore, the Dubai regulator highlighted that all market participants, regardless of whether they are licensed by VARA or not, must comply with regulations for marketing, advertising, and promotions. Violators will face fines between $5,500 and $55,000, with repeat offenders potentially facing a fine of up to $135,000. Overall, the new guidelines from VARA provide clarity for the cryptocurrency space in Dubai and ensure the protection of consumers, investors, and businesses.
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