Cryptocurrencies

Sheikh Mohammed approves law to regulate cryptocurrencies and NFTs – News

Sheikh Mohammed approves law to regulate cryptocurrencies and NFTs - News

Dubai Virtual Assets Regulation Act Presents Advanced Legal Framework to Protect Investors



Published: Wed 9 Mar 2022, 7:13 PM

Last update: Wed 9 Mar 2022, 7:49 PM

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, has approved a first-of-its-kind law to regulate virtual assets in Dubai.

The Dubai Virtual Assets Regulation Act presents an advanced legal framework to protect investors and promote responsible business growth within virtual asset (VA) industry governance that implements the highest international standards. higher.

An independent authority, established under the Dubai World Trade Center Authority, will oversee the regulation, licensing and governance of virtual assets, non-fungible tokens (NFTs) and cryptocurrencies.

Taking to Twitter, Sheikh Mohammed bin Rashid said: “The future belongs to those who design it. Through the Virtual Assets Act, we aspire to help shape the future of this ever-changing industry.”

He pointed out that Dubai has all the capabilities that qualify it to be one of the most important global centers in the field of virtual assets, especially the advanced legislative environment. “Dubai will provide the most advanced ecosystem of virtual assets in terms of organization, governance and security.”

The law, Sheikh Mohammed noted, presents a vital step that aims to advance the digital sector and protect investors’ rights.

It will apply to special development zones and free zones throughout the emirate, with the exception of the Dubai International Financial Centre.

The Dubai Virtual Asset Regulatory Authority (VARA) will monitor digital transactions and protect users’ personal data. He will also be responsible for the licensing and regulation of the industry in all of the Dubai Mainland and Free Zone territories (excluding DIFC).

VARA: the relevant industry body

Under the law, it is prohibited for anyone in the emirate to engage in activities without the authorization of VARA as the competent body in the emirate to regulate, supervise and control virtual asset services .

The authority is responsible for organizing and setting the rules and controls that govern the conduct of AV activities, including management services, clearing and settlement services, in addition to classifying and specifying the types virtual assets.

People wishing to engage in any of the AV activities must establish a presence in Dubai to do business.

VARA’s main responsibilities include:

  • Regulate the issuance and release of virtual assets and NFTs
  • Regulate and license virtual asset service providers
  • Protect the personal data of users and beneficiaries
  • Regulate and monitor platforms offering cryptocurrencies and digital wallets
  • Monitoring of digital transactions
  • Prevent price manipulation or modification of virtual assets

The activities subject to VARA authorization are:

  • Virtual asset platform operation and management services,
  • Exchange services between virtual assets and currencies, whether national or foreign,
  • Exchange services between one or more forms of virtual assets,
  • Virtual Asset Transfer Services,
  • Virtual Asset Custody and Management Services,
  • Services related to virtual asset portfolio,
  • Services relating to the offering and trading of virtual tokens.

Penalties

The acts that constitute a violation of the provisions of this Act and its related rulings, as well as the fines imposed on a violator, will be determined by a ruling issued by the Dubai World Trade Center Board of Directors.

In addition to the fine penalty, VARA may suspend the license for a period not exceeding six (6) months, cancel the license and coordinate with the relevant business licensing authority in the emirate to revoke the license. commercial license.

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Strengthen Dubai’s position globally

The creation of VARA is part of the strategy of the Dubai Securities and Exchange Higher Committee.

HE Helal Saeed Al Marri, Director General of the DWTCA, said the new law and the establishment of the Authority will strengthen the position of the UAE and Dubai in the AV industry and attract AV executives from around the world. Al Marri added that the Dubai Virtual Asset Regulatory Authority will provide a full range of VA services in coordination with the UAE Central Bank and the Securities and Commodities Authority.

Designed to anchor global AV market leaders, credible institutional enablers and innovation enablers, the authority will serve as a central custodial authority for this specialized industry.