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Dubai establishes virtual asset regulator and announces new crypto law

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The ruler of Dubai in the United Arab Emirates is Sheikh Mohammed bin Rashid Al Maktoum. Who also happens to be the Prime Minister, has unveiled a new law regarding virtual assets. In addition, a crypto regulator foundation.

Sheikh Al Maktoum announced on Wednesday that he had issued a law in the Emirate providing a legal framework for cryptocurrency, with the goal of protecting investors and “defining much-needed worldwide standards” for industry governance. A newly constituted Dubai Virtual Asset Regulatory Authority, or VARA, will also have enforcement powers throughout the Emirate’s special development zones and free zones, with the exception of the Dubai International Financial Centre, according to the ruler.

“Approving the virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority is a critical step in establishing the UAE’s position in this sector, one that intends to help the sector flourish while also protecting investors,” the Sheikh stated.

VARA

The emirate residents would be required to register with VARA before engaging in crypto-related activities, according to Sheikh Al Maktoum. Virtual asset businesses must also set up shop in Dubai. Operating a cryptocurrency exchange, making cryptocurrency transfers, and other services linked to offering and exchanging tokens are all examples of these activities.

VARA will classify and identify the categories of virtual assets, as well as set rules and controls, according to the statement. Anyone who breaks the new law might face fines or have their business permit cancelled or terminated. When there are infractions, the board of directors of the Dubai World Trade Centre will decide what to do.

It’s unclear how the legal framework will affect free zones like the Dubai World Trade Centre. Which stated in December that it would become a complete zone and regulator of cryptocurrency, products, operators, and exchanges. Binance CEO Changpeng Zhao praised the establishment of VARA in Dubai. Adding that regulatory certainty for cryptocurrencies was critical – the crypto executive bought an apartment in the city in October 2021.

Dubai, as an Emirate within the UAE, operates various “free zones”. Where people can form firms and apply for trade permits. The Financial Services Authority, for example, is the financial regulator for the Dubai International Financial Centre. And has created its own crypto framework.

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