Unpacking the new crypto regulatory law of Dubai
Crypto is making a lot of buzz around the world as it has changed the fortune of a normal man in a fraction of second. Almost all classes of people, ranging from a billionaire to a normal middle class individual, all are investing in it. However, along with handsome rewards, a high amount of risk is also associated thereto. Moreover, it is largely unregulated which further raises the concerns of investors.
So, in a major bid to regulate such virtual assets, the government of Dubai has introduced a new law (Law No. 4 of 2022) In this article, we are going to unpack the intricacies of this new law with the help of our best lawyers of Dubai.
What are virtual assets?
Before discussing the law, it is pertinent to understand the meaning of virtual assets. In the wording of our best lawyers of Dubai, virtual assets are innovative technology which are capable of trading, storing and transferring in the digital format. For instance – Bitcoin, crypto assets, and non-fungible tokens (NFTs).
It is pointed out by our best crypto lawyers of Dubai that rampant use of blockchain technology has raised multiple concerns from a regulatory point of view and a law on this subject was desperately needed.
Highlights of new virtual assets law
In the opinion of our best lawyers of Dubai, the new law aims to strike a balance between business growth and the regulation of virtual assets. Importantly, the application of this new law is extended to free zones and special development zones, excluding Dubai International Financial Center.
The term ‘virtual assets’ has been comprehensively defined under Article 2 of new law covering all types of currencies which are capable of trade through a virtual asset platform.
- Establishment of Dubai Virtual Assets Regulatory Authority (VARA)
The new law provides for the establishment of “Dubai Virtual Assets Regulatory Authority” (VARA). This authority is entrusted with the responsibility of regulating and supervising the virtual asset service in the Emirate. Further, it will prescribe and set up standards for dealing in virtual assets.
It is pointed out by our top lawyers of Dubai that all the traders who want to engage in providing operational and management services pertaining to virtual assets need to take prior permission from VARA. Further, the services relating to safekeeping and control of virtual assets will also need consent of VARA. In a nutshell, it can be said that VARA will act as a watchdog for all the activities happening in the virtual assets sphere in Dubai.
It is specifically highlighted by our best lawyers of Dubai that an interested trader needs to take other regulatory approvals for obtaining a commercial license.
Though the virtual asset industry is at a nascent stage, it is growing at a rapid pace. This new law by the government of Dubai is an important step to make the UAE a pioneer in the crypto arena. With this new law, the government is fulfilling the mandate of FATF which calls for the establishment of a regulating authority to prevent the misuse of virtual assets. If you want to engage in providing crypto services, you have to register with VARA, and for this purpose, you should consult our best lawyers in Dubai.
BSB legal is a specialized crypto advisory law firm of Dubai. Our best lawyers will assist you in drafting agreements, obtaining regulatory approvals, and doing other advisory work pertaining to your crypto. To know more information, kindly contact one of our best crypto lawyers in UAE. You can email us at firstname.lastname@example.org or call +971508014003.