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Thursday, April 25, 2024

Legacy Virtual Asset Operators in Dubai Given April 30 Deadline to Submit IDQs under VARA Regulations

Dubai’s Virtual Asset Regulatory Authority (VARA) is taking measures to regulate virtual asset operators in the emirate. VARA is working closely with the Department of Economy and Tourism (DET) and Free Zone Authorities (FZAs) to set a deadline of April 30 for initial disclosure questionnaires (IDQs) from all legacy market operators that conduct virtual asset activities in Dubai, except for DIFC. This marks the first step towards migrating the market to a fully regulated regime, in compliance with Cabinet Resolution No. 111 of 2022.

The resolution, which came into effect on January 15, 2023, requires all companies operating or seeking to operate in the virtual asset sector in Dubai to be licensed by VARA. To facilitate the transition of existing Virtual Asset Service Providers (VASPs) to the VARA regulatory regime and formalize the application process for new regulated licenses, VARA has been actively engaged with DET and Dubai’s various FZAs.

Also Read: Dubai Aims to Establish Itself as a Promising Hub for Cryptocurrency with VARA

VASPs that have submitted their IDQs and received an Application Acknowledgement Notice (AAN) will commence the appropriate course of action for those requiring regulation or registration under VARA by August 31, 2023. There are seven distinct types of regulated VA activity licenses that can be applied for, including Advisory Services, Broker-Dealer Services, Custody Services, Exchange Services, Lending and Borrowing Services, Transfer and Settlement Services, and Management and Investment Services.

Through the regulation of the virtual asset sector, VARA aims to ensure a level playing field, promote transparency, and protect consumers and investors from potential risks associated with virtual assets. This move is also expected to boost investor confidence and attract more businesses to Dubai’s rapidly growing digital economy.

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