VARA has identified eight distinct Virtual Asset (VA) activities that categorise the regulatory perimeter. The list of activities is designed to be flexible and evolutionary as the sector grows and develops over time. The industry is encouraged to view this list of activities as a solid foundation that offers room for innovation, rather than a finite register.
VASPs seeking to offer the below activities must apply for and receive a licence from VARA before undertaking VA activities in Dubai.
A VASP can apply to be licensed for multiple activities and aggregate them under a single overarching licence, except where certain Custody Services are concerned. Where Custody Services are concerned, there are specific requirements to segregate activities and/or demonstrate independence of governance or arms-length association from another.
In the current list of eight activities, Virtual Asset Custody Services is the only regulated activity that is required to be segregated from other Virtual Asset Services licence categories. In this instance, a VA Custodian must be set up as a distinct legal entity with a standalone licence.
Licensed VASPs are prohibited from proprietary trading or trading their Group’s portfolio of assets under the regulated activity(ies) licence. A separate company must be set up for proprietary trading.
VASPs that are licensed to undertake multiple activities must meet the requirements for each activity in full and maintain compliance at all times.
Any VASP or traditional economy entity seeking to offer the below VA activities must apply for and receive a licence from VARA before it can begin operations in or from the Emirate of Dubai, whether offered to customers that are residents of the Emirate, or to global customers where the activity is permissible.
VA Proprietary Trading will require a No Objection Certificate [NoC] from VARA to confirm that the activity may be undertaken with regulatory oversight without a VA Licence. Additionally, proprietary trading above certain trading volumes is an activity that must be registered with VARA.
To obtain a Propriety Trading NOC, VASPs need to contact their commercial licensors (Free Zones or DET) to complete their Initial Disclosure Questionnaire (IDQ).
All issuances which do not constitute a Category 1 VA issuance and defined per VARA Virtual Assets Issuance Rule Book Part I, Section C – ‘VA issuance categories and prior requirements’
• Entities must fill a VARA Issuance Approval Form [Category-2] and must provide information including the purpose and use of the VA, the nature of the business and activities for which the VA will be used.
• Entities should provide a Whitepaper, and full details of the issuer, amongst other requirements. VARA may request further information as it deems necessary to inform any decisions.
• Entities must exhibit compliance with AML CFT requirements.
• Entities must ensure compliance with technical, information security, data privacy, and cryptographic controls. Anonymity enhanced tokens are prohibited.
Please email to [email protected] to obtain an application form.