UAE’s Federal Financial Authority has announced that it is open to receiving licences from companies that want to provide services in the field of virtual digital assets within the country. In a press release, the Securities and Commodities Authority (SCA) said that it is compulsory for companies to obtain licenses from the regulator.
There has been an exemption made for the companies that have registered in the financial-free zones of the country. Although there has been an exemption for the companies registered in the financial-free zones, the government has clearly mentioned that it is mandatory to obtain a license from VARA (Virtual Assets Services Authority) for companies who wish to operate within the Emirate of Dubai.
Resolution number 111 of the UAE’s cabinet which was released on December 11, 2022, clearly states the need of regulating the virtual digital assets sector and also highlights its benefits like attractive investment opportunities and a good platform for global companies that operate under this sector.
What do the regulations say?
On February 1 2022, the SCA announced that it will be in charge of the regulatory process. The regulations are mainly to ensure investors’ protection from illegal activities in the field of virtual assets.
As per, SCA, the regulations are applicable for all the transactions that take place in the virtual assets space. The financial-free zones of the country are also included in it. Whereas, these regulations are not applicable to the payment services under the virtual digital assets as they are monitored by the Central Bank of the country.
The companies that fail to imply with the new regulations have to pay a hefty fee of $2.7M.