While major nations across the globe are still walking on eggshells when it comes to virtual assets, Dubai has embodied the spirit of acceptance and has embraced cryptocurrencies, NFTs and various virtual assets. It was one of the first regions to come up with a regulatory body to monitor the functioning of Virtual Assets Service Providers (VASPs). VARA which stands for Virtual Assets Regulatory Authority Being the world’s first independent virtual asset regulator, VARA functions as a transparent and trusted guiding authority for the burgeoning world of Virtual Assets. VARA intends to take its purpose globally by developing a simple framework for regulating the business. VARA assists in minimizing risk and ease cross-border operations and innovation to ensure safe market acceptance and growth by using experience from global experts and organizations and engaging with necessary regional financial regulatory authorities.
VARA is created with the objective of to safeguard the interests of the players in the industry. Apart from safeguarding the interests of market participants, it also aims to promote virtual assets and attract businesses from worldwide to set up their base in Dubai.
On 7 February 2023, the Dubai Virtual Asset Regulatory Authority (VARA) issued the Virtual Assets and Related Activities Regulations 2023 (the Regulations), an all-encompassing virtual asset regulatory framework applicable to all Virtual Asset Service Providers (VASPs) in Dubai (excluding the Dubai International Financial Centre (DIFC)). The Regulations provide some much-anticipated regulatory certainty which in turn, should promote protection for investors, sustainable market growth, and stability in the virtual assets sector. VARA published the ‘Virtual Assets and Related Activities Regulations 2023’ to govern the activities of VASPs in Dubai. One of the primary requirements of the Virtual Assets and Related Activities Regulations 2023 that VASPs in Dubai must achieve is compliance with UAE AML-CFT laws. VARA consultants in Dubai can assist VASPs in meeting the applicable regulatory criteria and provide them with an assurance that they are protected and are following each and every regulation pertaining to virtual assets.
What is a Virtual Asset in Dubai?
A virtual asset is defined as a “digital representation of value that may be digitally traded, transferred, or used as an exchange or payment tool, or for investment purposes” by the Dubai Virtual Assets Law, which was passed on March 9, 2022. This includes Virtual Tokens and any other digital representation of value specified by VARA.
Who are Dubai’s Virtual Assets Service Providers?
VASPs are businesses licensed by VARA to carry out virtual assets activities (VA Activities) in the emirate of Dubai, according to the Virtual Assets and Related Activities Regulations 2023. In Dubai, the following activities are classed as VA Activities:
- Advisory Services
- Broker-Dealer Services
- Custody Services
- Exchange Services
- Lending and Borrowing Services
- Payments and Remittances Services
- VA Management and Investment Services
Why do you need a VARA Consultant?
Running a virtual assets business is not an easy task. It requires a lot of dedication, time, and hard work to manage it all. It is nearly impossible for every business to be self-sufficient in this era. One of the most important aspects that such businesses have to consider is having legal consultants for VARA on board. This way, while the VARA compliance and legal part is being taken care of by a consultant, business owners can focus more on the operational part of the business. Regulations and law evolve from time to time, hence keeping a track of them becomes difficult for businesses. However, with a VARA consultant, businesses won’t face this challenge. From application for a license to compliance, your VARA consultant should have it all covered.
How to choose the perfect VARA Consultant for your business?
- Industry Experience: It is very important for your consultant to know the industry well. The virtual assets industry can be a complicated one. Make sure you consultants have worked on projects previously and have good in- depth knowledge of the industry and most importantly, your business.
- Alignment of Goals: The way your consultant works must align with the long-term goals of the company. Every business is different and hence every business requires a tailor-made solution. Since one size doesn’t fit all, a consultant should be able to strategize a plan specifically for your business.
- Knowledge of Law: This is the most important aspect one needs to keep in mind. No one understands legislations better than a seasoned team of lawyers with years of experience in the field. Lawyers with knowledge related to technology are the most suitable.