VARA and SCA Announce Licensing Applications and Deadlines for Virtual Asset Service Providers in Dubai
Introduction
The Securities and Commodities Authority (SCA) has recently announced the start of accepting licensing applications for companies wishing to provide virtual asset services in the UAE. This development comes as the Virtual Assets Regulatory Authority (VARA) has also set clear requirements for the virtual asset (VA) sector in the emirate of Dubai. The deadline for submitting initial disclosure questionnaires (IDQs) has been set for April 30, 2023, marking the first step towards migrating the VA market to a regulated regime.
VARA and Licensing Applications
Following the approval of the SCA’s Board of Directors on the decision to regulate virtual asset service providers, companies can now submit their applications for licensing. Under Cabinet Resolution No. 111 of 2022, which came into effect on January 15, 2023, all companies operating or seeking to operate in the VA sector in or from Dubai must be licensed by VARA, and companies in other emirates must be licensed by the SCA.
Collaboration with DET and FZAs
VARA is working closely with Dubai’s Department of Economy and Tourism (DET) and Free Zone Authorities (FZAs) to meet the April 30 deadline for receiving all IDQs. This collaboration aims to establish a secure marketplace, ensure responsible participation, and protect investors and consumers effectively. It is part of Dubai’s D33 Agenda, which outlines the mission to establish the emirate as the capital of the future economy, anchored by metaverse, AI, Web 3.0, and blockchain technologies.
Deadline and Next Steps for Legacy Market Operators
Legacy market operators carrying out VA activities in Dubai (excluding DIFC) must declare their intention to undertake regulated activities by submitting an IDQ to their current licensing authority – DET or any of the FZAs – by April 30, 2023. After receiving an Application Acknowledgement Notice (AAN), operating virtual asset service providers (VASPs) will have until August 31, 2023, to complete the appropriate course of action for those requiring to be regulated or registered under VARA.
Conclusion
The announcement by VARA and SCA marks a significant step in regulating the virtual asset sector in Dubai. The new licensing regime aims to provide a safe and sustainable operating environment for VA companies, further establishing Dubai as a credible destination for the industry. By fostering collaboration with DET and FZAs and setting clear deadlines, VARA is poised to position Dubai as a global role model for VA sector development.
