-
Dubai’s VARA has released Version 1.0 of activity-based rulebooks for crypto firms.
-
The new cryptocurrency regulations strengthen margin trading controls, token distribution and
-
Dubai’s licensed companies have 30 days to comply the updated crypto regulations.
Dubai’s Virtual Assets Regulatory Authority has updated its regulatory guidelines for licensed cryptocurrency companies. The new requirements must be met by June 19, 2018. The regulator announced on May 19 that Version 2.0 of the Activity-based Rulebooks was released. This version introduces improved controls to improve market integrity, risk oversight and control.
The revised framework reinforces regulations regarding margin trading, token distribution services, and compliance requirements for all licensed activities. VARA has clarified the definitions of collateral wallet arrangements in order to ensure consistency among virtual asset service provider (VASP) implementation.
VARA announced that “in line with global regulatory practices, a 30 day transition period has been granted for all impacted virtual assets service providers. Full compliance is required by 19th June 2025,” VARA stated. During the transition period, regulatory team members will be working directly with licensed entities to implement the updated rules.
VARA Introduces Enhanced Supervision Mechanisms
VARA’s new framework improves eight regulated activities: advisory, broker-dealer and custody, exchange and lending and borrowing, investment and management of virtual assets, settlement services and virtual asset transfer, and virtual asset issuance.
The revisions also align risk-management and disclosure obligations in areas where activities overlap, such as brokerage, custody and exchange services. This alignment is intended to eliminate contradictory requirements which previously created compliance challenges for companies operating across multiple service categories.
Related: Ripple can now access $400 billion UAE trade zone with new DFSA payment license
VARA’s updated rulebooks have a key focus on margin trading. They have tightened the leverage thresholds and mandated clearer standards of collateralization. They also increased monitoring obligations for VASPs that offer margin trading services. These measures are in line with similar restrictions implemented globally by regulators concerned that excessive leverage on cryptocurrency markets creates systemic risks.
The updated framework includes a section dedicated to token distribution, which establishes licensing requirements, investor protection measures, as well as marketing restrictions for crypto-token offerings. The VARA spokesperson emphasized new marketing restrictions, especially for “retail-facing offerings.”
This indicates that the regulator is taking measures to protect less sophisticated investors from token offerings with high risks. Dubai continues to position themselves as a leading hub for crypto and, at the very same time, implements increasingly comprehensive regulations.
This site is for entertainment only. Click here to read more
