The UAE’s proposed legislation governing virtual assets and the companies that provide services for them will take effect on January 15, 2023. They will add more control to the nation’s virtual asset market. The UAE Cabinet approves of protecting investors and regulates regulating the sector.

According to local sources, the legislation also specifies penalties for rule violations. These penalties range from an alert and restriction on the registration or sale of virtual assets to license revocation and a fine of up to $2.7 million.

Regarding virtual assets and companies that provide these services, the United Arab Emirates has published several regulations. They also developed a virtual asset system (VARA) and the Virtual Asset Regulatory Authority.

In the past, supervisory initiatives have been introduced in areas of the UAE that deal exclusively with virtual assets, such as the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC).

According to the UAE Cabinet, this rule would aid in creating a favorable investment, economic, and financial environment for foreign businesses and institutions to conduct business in the nation.

SCA reserves the right to accept as licensees parties who have sought or already possess a license from a “local licensing authority,” but this is acknowledged. Although it is recognized in the Cabinet resolution that SCA is the leading authority in the context of the virtual asset eco-system, some of its supervisory responsibilities might eventually be transferred to local licensing agencies, according to Bicknell.

As well as licensing restrictions, additional duties, and compliance requirements, the regulation includes penalties for violating it. They can be anything from a warning to the suspension of virtual asset trading or listing to license revocation and fines up to AED 10 million ($2.7 million).

Posted Date: May 26, 2023