Cryptocurrency—The news that Dubai has passed its first law to regulate the crypto sector has made the rounds on the internet. It has also established a dedicated regulator to oversee crypto-related activities and service providers. This storey is going viral on social media, and individuals who follow crypto news are highly interested in learning more about it. They want to know everything there is to know about it.
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The Emirate of Dubai has passed its first crypto law and established a virtual asset regulating agency. This comes as the emirate strives to establish itself as a global leader in emerging technologies such as cryptocurrencies and blockchain. The Dubai Virtual Assets Regulatory Authority has been established within the United Arab Emirates (UAE), and it will cooperate with all associated organisations to enhance security and transparency for crypto investors.
UAE has taken another step toward becoming a global crypto hub, nearly a month after announcing plans to grant crypto licences.
The Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, who is also the Vice President and Prime Minister of the United Arab Emirates, passed a first-of-its-kind law to govern virtual assets yesterday.
“The future belongs to those who design it,” he remarked on Twitter. According to a storey in KhaleejTimes, “we hope to participate in determining the future of this ever-evolving sector” through the virtual asset law.
“Today, we approved the virtual assets law and established the Dubai Virtual Assets Regulatory Authority. A step that establishes the UAE’s position in this sector. The Authority will cooperate with all related entities to ensure maximum transparency and security for investors.”
“Dubai will provide the most sophisticated virtual asset ecosystem in terms of organisation, governance, and security,” Sheikh Mohammed said, adding that the law is a critical step toward advancing the digital economy and protecting investors’ rights.
The Dubai Virtual Assets Regulatory Authority Was Established To Regulate Cryptocurrency And Non-Fiat Currencies
The regulating body’s role VARA
The Dubai Virtual Assets Regulatory Authority, or VARA, will be in charge of regulating and authorising virtual asset service providers as well as regulating and authorising the sale of virtual assets and virtual tokens.
According to Khaleej Times, the virtual assets law will apply to special development zones and free zones across the Emirate, with the exception of the Dubai International Financial Centre.
It lays forth a sophisticated legislative framework to safeguard investors and promote responsible company growth within a virtual asset (VA) industry governance system that adheres to the highest international standards.
Dubai’s Ruler also announced the formation of Dubai VARA (Virtual Assets Regulatory Authority). The autonomous authority will supervise the regulation, licencing, and governance of virtual assets, non-fungible tokens (NFTs), and cryptocurrencies, which will be overseen by the Dubai World Trade Center Authority.
It will also be in charge of licencing and regulating the sector on both the Mainland and the Free Zones of Dubai (exclusive of DIFC).
Aside from these obligations, the VARA will ensure that investor data is kept secure and safe in the hands of virtual asset service providers. The Dubai World Trade Centre Authority will be tied to the organisation (DWTCA).
Details Surrounding The Law & Vara Rules Regarding Cryptocurrency And Non-Fiat Currencies
It is illegal for anyone in the Emirate to engage in operations without the approval of Dubai VARA, the Emirate’s authorised agency for regulating, supervising, and controlling virtual asset services.
People who want to engage in any of the VA activities must first establish a company presence in Dubai.
VARA’s main responsibilities include organising virtual asset issuance and trading, organising and authorising virtual asset service providers, ensuring the highest standards of protection for beneficiaries’ personal data, organising the operation of virtual asset platforms and portfolios, and monitoring transactions to prevent virtual asset price manipulation.
Virtual asset transfer and management services, exchange services between virtual assets ad currencies, operating and managing virtual asset platforms, exchange services between one or more forms of virtual assets, and virtual asset custody and management services are all subject to VARA authorization and control.
A judgement issued by the board of directors of the Dubai World Trade Centre would also determine the acts that constitute a breach of the requirements of this virtual asset law and its connected decisions, as well as the penalty imposed on an offender.
Aside from imposing a fine, Dubai VARA has the right to suspend the permission for up to 6 months, cancel the permit, and collaborate with the Emirate’s competent commercial licencing authority to cancel the commercial licence.
With the exception of the Dubai International Financial Centre (DIFC), which is a special economic zone under the jurisdiction of the Dubai Financial Services Authority, the law is likely to take effect across the UAE (DFSA).
The DFSA has said that it will create its own guidelines for cryptocurrency regulation in the DIFC in the near future. Similarly, the Securities and Commodities Authority (SCA), the UAE’s securities regulator, has indicated that it is developing its own regulatory framework for cryptocurrencies, which it plans to deploy soon.
With the rule in place, Dubai now has a legal mandate for selling and trading cryptocurrencies like Bitcoin, despite the fact that many countries, like China, have taken the opposite approach.
Furthermore, the authority is required to adhere to the “highest standards of preservation for heiress” personal data. It must also keep track of virtual asset transactions in order to perform the appropriate price manipulations. Crypto investment platforms provide exchanges between cryptocurrencies and fiat currencies, as well as between one or more cryptocurrencies, and are primarily subject to VARA approval and guidelines.
Furthermore, companies have offered crypto transfer services, and custody and administration services are governed by the legislation. The United Arab Emirates has been compelled to adopt crypto rules and strategies in order to attract new enterprises. The Commodities Authority is the country’s securities regulator.