With VARA’s regulations, Virtual Asset Service Providers (VASPs) are bound to comply with a list of regulations including licensing requirements
VARA was established in 2022 for regulating Virtual Assets and Virtual Asset Service Providers in the emirates
Guidelines for regulating cryptocurrencies in the country. According to these regulations released by VARA, non-compliant projects can be fined up to 500,000 AED.
Last year, the blockchain industry had to undergo a terrible time due to the failure of a series of projects. However, 2023 has begun with countries all around the world working towards regulating cryptocurrencies. VARA’s regulations on crypto assets could set a standard for Industry and empower the regional countries to draft their crypto regulations.
Dubai is the center of blockchain innovation and global events, with hundreds of well-known crypto projects based in the city. From Binance to MATIC, most of the crypto giants have their headquarters in Dubai, making crypto regulation extremely important for developing a safe environment in the country.
With VARA’s regulations, Virtual Asset Service Providers (VASPs) are bound to comply with a list of regulations including licensing requirements, market regulations, classifications of VDAs, and many others. Even though VARA has released these regulations, they are awaiting approvals from the board of directors.
What is VARA?
VARA was established in 2022 for regulating Virtual Assets and Virtual Asset Service Providers in the emirates. VARA is affiliated with the Dubai World Trade Center Authority which is responsible for monitoring, regulating, and supervising the activities of VASPs in the UAE excluding the Dubai International Financial Center.
VARA aims to promote the UAE as a regional hub of blockchain and cryptocurrency innovation, leading to a digital economy in the country. Apart from that, VARA is also working towards investor protection, curbing the illicit use of cryptocurrencies, and monitoring the operations of different crypto platforms.
Hefty Fines on Non-Compliance
Guidelines released by VARA also include a separate section that highlights the penalties for non-compliance with mentioned regulations. According to the paper released, any failure in complying with the rules regarding any marketing regulation may lead to a fine of 200,000 Dhirams. Apart from that, the repeated violation can lead to an additional fine of 500,000 Dhirams.
Apart from that, any investor with an investment value of more than $250 million is required to be registered with the VARA. The regulations also classify advisory services, licensing, and monitoring of custody, lending, and exchange services with annual fees ranging from 40,000 Dhirams to 200,000 Dhirams.
Dubai is one of the most popular blockchain hubs of the world and home to some of the leading thought leaders. These regulations will surely bring the stability that the crypto industry had been searching for for a long time.