Dubai Ruler Announces New Crypto Law and Regulatory Authority
- The Prime Minister of Dubai issued the Dubai Virtual Asset Regulation Law yesterday.
- The new law will focus on protecting investors and creating international standards for crypto.
- As per the law, every crypto business is mandated to be authorized by the crypto authorities.
Through this law, Dubai will be establishing regulations for crypto businesses and promoting responsible growth.
Crypto in the Emirate
In addition to creating the Dubai Virtual Asset Regulation Law, Dubai is also establishing the Dubai Virtual Asset Regulatory Authority (VARA), which will be overseeing the upholding of the law.
Applicable throughout Dubai, except for the Dubai International Financial Centre, the law will create a legal framework for crypto operations.
Along with this, Dubai intends on providing the most advanced crypto ecosystem by designing international standards for virtual assets.
In line with the announcement, Sheikh Mohammed bin Rashid Al Maktoum said,
“Approving the virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority is a vital step that establishes the UAE’s position in this sector a step that aims to help the sector to grow and protect investors.”
The new regulatory body will be linked to the Dubai World Trade Centre Authority (DWTCA). It will be a part of the expansion strategy of the Dubai Securities and Exchange Higher Committee.
The new crypto law specifies that an enterprise must have a presence in Dubai to conduct business related to virtual assets. Furthermore, they must be authorized by the VARA.
Although the law did not specify what asset class virtual assets would fall in, it did mention that failure in adhering to the policies could result in the businesses facing fines or even losing their operating permit.
Before the Law
Due to the uncertainty of the authenticity of crypto products and services, Dubai had announced penalties for crypto scammers late last year, which came into effect this January.
As per those laws, any misleading or inaccurate promotion of cryptocurrencies could result in an AED 1 Million ($272k) fine or five years of imprisonment.
Regardless, thanks to Dubai being an income tax-free and capital gains tax-free country, crypto profits were not subjected to taxation either, which continues with the new crypto law.