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Prabhjeet Bhatla
Mar 9, 2022
by Prabhjeet Bhatla

Sheikh Mohammed Approves Law to Regulate Virtual Assets

Bitcoin
His Majesty Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the United Arab Emirates and Ruler of Dubai, has signed the world's first law on virtual assets regulation.

The regulation was enacted with the goal of making Dubai a prominent actor in shaping the future of virtual assets while also encouraging responsible economic growth.

Sheikh Mohammed confirmed that Dubai will play a significant role in shaping the worldwide future of virtual assets:

"Today, we are engaged in shaping the global future of virtual assets."

Sheikh Mohammed emphasized that Dubai possesses all of the qualities that make it one of the most important worldwide centres for virtual assets, particularly the advanced regulatory environment.

"In terms of organization, governance, and security," he continued, "Dubai will deliver the most advanced virtual asset ecosystem."
“Approving the virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority is a vital step that establishes the UAE’s position in this sector… a step that aims to help the sector to grow and protect investors.”

Dubai Virtual Assets Regulatory Authority (VARA)

The Dubai Virtual Assets Regulatory Authority, a Dubai World Trade Centre affiliate, will be in charge of overseeing and monitoring regulations and disclosures.

The Authority will oversee and regulate the emirate's future growth of virtual assets. It would also grant virtual asset service providers licenses and safeguard beneficiaries' personal information.

Activities subject to VARA authorization are:

  • Operating and managing virtual assets platforms services;

  • Exchange services between virtual assets and currencies, whether national or foreign;

  • Exchange services between one or more forms of virtual assets;

  • Virtual asset transfer services;

  • Virtual asset custody and management services;

  • Services related to the virtual asset portfolio;

  • Services related to the offering and trading of virtual tokens.

    • The authority is also tasked with organizing and establishing the rules and controls that govern the conduct of virtual asset activities, according to the law. This covers management, clearing, and settlement services, as well as the classification and specification of virtual asset types.

    To conduct business, anyone intending to engage in any of the virtual asset operations must first establish a presence in Dubai.

    With the exception of the Dubai International Financial Centre, the law's provisions apply across the emirate, including special development zones and free zones.

    Violation of this law could result in:

    • The penalty of a fine;

    • Suspension of the permit for a period not exceeding six months;

    • Cancellation of the permit; and

    • Cancellation of the commercial license.

      • The new law and the establishment of the Authority, according to Helal Saeed Al Marri, Director General of the DWTCA, will strengthen the UAE and Dubai's position in the virtual asset sector and attract leaders from all over the world. The Dubai Virtual Asset Regulatory Authority, according to Al-Marri, would provide a comprehensive spectrum of VA services in collaboration with the UAE Central Bank and the Securities and Commodities Authority.

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      Sheikh Mohammed Approves Law to Regulate Virtual Assets
      Prabhjeet Bhatla
      Prabhjeet Bhatla is a cryptocurrency writer covering startups and a researcher since 2020. She has authored many articles for Entrepreneur India and APAC (digital and print) on cryptocurrency and ever-evolving Blockchain, the technology behind Bitcoin, and other cryptocurrencies. She specializes in applied cryptography, privacy-enhanced information storage systems, anonymous cryptocurrencies, elliptic curve crypto-systems, and satellite television piracy.

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