The United Arab Emirates’ government financial regulatory body (UAE) has stated that it would begin accepting license applications from businesses seeking to offer virtual asset services domestically.
All virtual asset service providers (VASPs) operating in the nation must submit an application and get a license from the regulator, with the exception of those licensed in the nation’s financial free zones, the Securities and Commodities Authority (SCA) stated in a news statement.
The virtual asset services authority (VARA), the emirate of Dubai’s financial regulator, will continue to be a requirement for digital asset businesses doing business there. These businesses must also submit an application to VARA and get a license. In an effort to create a “attractive investment, economic, and financial environment for global companies and institutions operating in the virtual assets sector,” the UAE Cabinet approved Resolution Number 111 of 2022 on December 11, 2022.
According to the cabinet resolution, the SCA formally declared on February 1 that it is taking on the obligations of regulating and overseeing the virtual assets industry. The goal of the decision, according to the SCA, is to “ensure the protection of investors’ funds in virtual assets from illegal practices.”
The SCA further stated that any transactions involving virtual assets for investment purposes, including those taking place in the nation’s non-financial free zones, are covered by the ruling. The regulator did, however, set certain restrictions. They clarified: “As virtual assets utilized for payments are under the Central Bank’s purview, its provisions do not apply to such virtual assets. The same holds true for financial free zones.
Irina Heaver, a blockchain attorney based in the UAE, talked with Cointelegraph on January 13 to discuss the consequences of the new government virtual asset law. Heaver claims that failing to follow the new rule might lead to criminal prosecution, disgorgement of gains, and financial penalties of up to 10 million AED ($2.7 million).
