The Vice President and Prime Minister of UAE and Ruler of Dubai, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, approved a first-of-its-kind law to regulate virtual assets in Dubai, UAE.
In recent years, the United Arab Emirates has taken steps to continue its commitment to creating an ecosystem that can generate long-term economic growth through digital innovation. In September 2021, the Securities and Commodities Authority (SCA) and the Dubai World Trade Centre Authority (DWTCA) signed a Memorandum of Understanding to support the regulation, offering, issuing, listing and sale of crypto assets and related financial activities under the DWTCA’s free zone.
In line with this commitment, and in a relatively short period of time, the Emirate of Dubai adopted Law No. 4 of 2022 of 28 February 2022 on the Regulation of Virtual Assets in Dubai’s Emirate (“Dubai Virtual Assets Law”) or the (“DVAL”). DVAL is applicable throughout the Emirate of Dubai including Special Development Zones and Free Zones except for the Dubai International Financial Centre (DIFC).
The activities subject to VARA authorisation are as below:
- Operating and managing virtual assets platforms
- Exchange services between virtual assets and currencies (national or foreign)
- Exchange services between one or more forms of virtual assets
- Virtual asset custody and management services
- Virtual Asset transfer services
- Services related to the offering and trading of virtual tokens
- Virtual Assets Management Services
As per DVAL, an entity or person wishing to carry out any Virtual Assets Related Activities is required to establsih a presence in Dubai to conduct Virtual Assets related transactions.
For any violations of DVAL, fines will be determined and imposed by the Board of Directors of the Dubai World Trade Centre. In addition to the fine, the following additional penalties may be imposed: (i) Suspension of the Virtual Assets permit for a period up to Six (6) months; (ii) Cancellation of the Virtual Assets permit; (iii) Cancellation of the commercial license of the entity in the Emirate of Dubai.
Please stay connected for future updates or get in touch with our team who can answer your questions and provide insight into the new DVAL.