UAE’s federal financial regulator opens licensing applications for VASPs

Would You like a feature Interview?

All Interviews are 100% FREE of Charge

The Federal Financial Regulatory Authority of the United Arab Emirates (UAE) has announced that it will begin accepting license applications for companies wishing to offer virtual asset services in the country.

Securities and Commodity Administration (SCA) Said The press release states that all Virtual Asset Service Providers (VASPs) operating in the country must submit an application and obtain a license from the regulator.

Meanwhile, digital asset companies operating in the Emirate of Dubai must comply with their own financial regulator, the Virtual Asset Services Authority (VARA). These companies must apply for and obtain a license from VARA.

11 December 2022, UAE Cabinet issued Resolution 111 of 2022 regulates virtual assets in order to provide “an attractive investment, economic and financial environment for global companies and institutions operating in the virtual assets sector”.

SCA officially announced The SCA indicates that it has taken on the task of regulating and supervising the crypto-asset sector, following a cabinet decision of 1 February. According to the SCA, the resolution aims to “ensure that investors’ funds in crypto assets are protected from illegal activity.”

Related: From Dubai to Abu Dhabi: How to use NFT in UAE

The SCA added that the resolution applies to all transactions related to virtual assets for investment purposes, including domestic non-financial free zones. However, the regulator has also specified some restrictions. they explained:

“That provision does not apply to virtual assets used for payment purposes as they are under the jurisdiction of the central bank, nor does it apply to financial free zones.”

On January 13th, UAE-based blockchain attorney Irina Heber spoke with Cointelegraph to explain the implications of the new federal crypto-assets law. Failure to comply with the new law could result in fines of up to AED 10 million ($2.7 million), profit confiscation and criminal investigations by prosecutors, Heber said.

magazine: Unstable Coins: De-Pegging, Bank Runs and Other Risks Looming