The United Arab Emirates’ Virtual Assets Regulatory Authority (VARA) recently announced its regulations for virtual assets. The guidelines outline the core principles and objectives for issuing cryptocurrencies, licensing regimes, anti-money laundering and terrorism financing, and marketing and promotions. The VARA stated that “the issuance of crypto assets with enhanced anonymity is prohibited in the UAE”.
Popular anonymous coins such as Monero (XMR) and Zcash (ZEC) are among those that are viewed as problematic by regulatory authorities due to the threat of money laundering and other abuses; they are no longer supported by cryptocurrency exchanges in Japan.
The VARA says the new rules are intended to attract crypto businesses, protect digital asset dealers and investors, and curb illegal practices, all in service of promoting Dubai as a regional and international hub for virtual assets, boosting its competitive edge both locally and internationally.
The guidelines define misconduct in the market as insider trading and market manipulation, with individuals facing fines of up to AED 20 million (~USD 5,5 million), and virtual currency service providers facing fines of up to AED 50 million (~USD 13,6 million) or 15% annual revenue of any VASP.
All businesses must also apply, obtain, and maintain a license issued by the VARA in order to conduct virtual currency services in the UAE. In the case of a violation or a business falling into debt, the license may be canceled. Other cryptocurrency exchanges operating in Dubai include Coinbase, Huobi, Binance, and Kraken.
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