Dubai is one of the most advanced centers in the Middle East, where many crypto enthusiasts live. This jurisdiction has a favorable attitude towards the crypto industry in general; therefore, it establishes elementary licensing rules. Today we will discuss what VARA regulations are and what requirements it sets for crypto organizations.
VARA has created requirements for Dubai Virtual Funds
These requirements apply to all organizations that provide crypto services here but do not include companies doing business here. The regulation consists of the following activities:
- dealer and broker;
- services for providing deposit accounts;
- crypto exchange services (between crypto assets, fiat, and vice versa);
- credit services and loans;
- payment and financial transfer services;
- asset management and investment.
As you can see, these requirements are very soft, and it will be enough for you to comply with them. If you are not sure, you can seek the help of professionals who will analyze the activities of your company and give recommendations on how to fix problems.
What is the VA platform?
Consider how the system functions. Its requirements apply to the terms of registration and permitting of VAPS. Moreover, the requirements describe a controlled activity with virtual means. The provisions describe all conditions related to applying the AML policy and violations in the crypto market.
Firms that comply with the permitting requirements must follow a set of rules to maintain a license for the further activities of the company with assets. In addition to these 4 rules, 7 more sets of powers are provided for specific activities. These rules contain a detailed description of the risks associated with providing various types of crypto-activities. All control methods are mandatory if VARA licenses the company. But regulations have also been created that control the issuance of assets.
Legal coverage of the territory
The legislation confirms that VARA’s jurisdiction extends to the entire territory of Dubai but omits ADGM and DIFC. Here is a list of requirements that apply to other regulatory bodies:
- UAECB and VAPA will regulate fiat-backed payment tokens and stablecoins;
- UAECB will deal with the regulation of crypto;
- there is no need to request a permit from the SCA if the organization already has a license;
- Any company with a currency commercial permit in the Dubai Free Zone can apply for a separate permit to operate with virtual funds.
It follows from the above that the United Arab Emirates conducts comprehensive control related to the crypto activities of financial organizations.
What are the requirements for the companies?
All organizations associated with crypto activities are subject to specific conditions that apply to crypto business management methods and capital investments and to the company’s structure.
Two authorized persons with practical activity experience are responsible for obtaining a license. These responsible persons must be residents of the UAE and be holders of an Emirates passport. The exact requirements apply to the company’s management and top managers.
We will indicate the areas of activity that will be regulated by the Regulations and checked to obtain a license:
- adherence to general principles;
- management activities and staff training;
- accounting and auditing;
- analysis of all risks;
- application of the AML program and KYC.
All this will be subject to verification, and if inconsistencies are found, the company will be presented with conditions to exclude them. Otherwise, the permit will fail.
There is no developed complete licensing process, which should consist of four stages. But there are rules for the initial stage of permitting:
- obtain a temporary permit for a permit;
- prepare documents according to the required list;
- licensing MVP;
- obtaining a full license for the FNP product.
The regulation states that if violations are found in the conduct of crypto business, a fine of up to 13,600,000 US dollars is imposed. Thus, VARA comprehensively regulates the crypto activities of companies that must comply with specific requirements and conditions for licensing.
Getting permission in this jurisdiction provides a huge number of advantages because here, it will be easy for you to develop and attract new investments. In addition, very simple taxation rules apply here, and in general, it will not be difficult to obtain a permit here.