Dubai’s Ruler has issued a Dubai Virtual Asset Regulation Law to create an advanced legal framework to protect investors and design international standards for virtual asset industry governance which will promote responsible business growth in a regulated environment.
The Law applies throughout the Emirate, including special development zones and free zones, except the DIFC.
A Dubai Virtual Asset Regulatory Authority will be established. It will have its own legal personality and financial autonomy but report to the Dubai World Trade Centre Authority.
It will be responsible for licensing and regulating the sector across the Emirate. It will also provide a full range of virtual asset services together with the Central Bank and Securities and Commodities Authority.
The Law defines the tasks and competencies of the Authority. It will be considered the competent body in the Emirate to regulate, supervise and control virtual asset services.
It also states the Authority will be responsible for organising and setting the rules and controls which govern the conduct of virtual asset activities. This includes management services, clearing and settlement services and classifying and specifying types of virtual assets.
Under the Law, no one can engage in activities without authorisation from the Authority. Any one wanting to practice a virtual asset activity must establish a presence in Dubai to conduct business.
The Authority will be responsible for operating and managing virtual assets platforms services, exchanging services between virtual assets and currencies, whether national or foreign and exchanging services between one or more forms of virtual assets.
They will also be responsible for virtual asset transfer services, virtual asset custody and management services as well as services related to virtual asset portfolios and services related to the offering and trading of virtual tokens
Acts which violate the Law and its related decisions and the fines imposed on violators, will be determined by a Decision which will be issued by the board of directors of the Dubai World Trade Centre.
As well as a fine, the Authority may suspend a violator’s permit for up to six months, cancel the permit and cancel the commercial license together with the relevant commercial licensing authority in the Emirate.
The Law will be published in the Official Gazette and come into force on the day it is published. Also reported in Alroeya on 9 March 2022. For full story, click here.
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