UAE Begins Licensing VASPs For Companies To Protect Users’ Interests

Key Points:

• The federal financial authority of the UAE has stated that it would begin accepting license applications from firms that provide virtual asset services.
• According to the SCA, this does not apply to sellers licensed in the country’s financial-free zone.
• However, digital asset firms operating inside the emirate of Dubai must still apply for a VARA license.

The Securities and Commodities Authority (SCA) of the United Arab Emirates (UAE) has announced that it would begin accepting applications for virtual asset service providers (VASPs) licenses for virtual asset service providers.

According to SCA, all VASPs operating in the nation must apply for and get a license from the regulator, with the exception of those licensed in the country’s financially free zones. SCA stated:

“All VASP companies in the country must submit an application and obtain a license from the regulatory body, and companies licensed in the free zone under the jurisdiction of the World Trade Center Office do not need to apply separately.”

Nevertheless, digital asset businesses operating in Dubai must still comply with the emirate’s own financial regulator, the virtual asset services authority (VARA). These businesses must also apply for and get a VARA license.

Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister and Ruler of the United Arab Emirates, announced the passage of legislation to establish a legal framework for cryptocurrency in the Emirate of Dubai, with the goal of protecting investors and designing much-needed international standards for industry governance in early March.

The UAE Government enacted Resolution Number 111 of 2022 on December 11, 2022, regulating virtual assets in an effort to establish an attractive investment, economic, and financial environment for global enterprises and institutions operating in the virtual assets sector.

The SCA formally declared on February 1 that it would take on the responsibility of regulating and overseeing the virtual assets industry in accordance with a cabinet decision. The decision intends to guard investors’ capital in virtual assets from illicit actions, according to the SCA.

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Harold

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