Dubai Has Implemented New Cryptocurrency Regulations, With Fines Of Up To $135,000 Imposed

The Virtual Asset Regulatory Authority (VARA), the sole custodial institution responsible for licensing and regulating crypto activity in Dubai, has issued rules for Virtual Assets Service Providers (VASPs).

The new laws provide a legal framework for cryptocurrency with the goal of safeguarding investors and developing much-needed worldwide standards for industry governance. Furthermore, with the exception of the Dubai International Financial Centre, the VARA now has enforcement authority in Dubai's special development and free zones.

The regulations provide four mandatory rulebooks and activity-specific rulebooks that VASPs must follow in order to provide their services. The “Full Market Product Regulations” offer instructions for compliance, risk management, market behavior, and other criteria.

“With unique regulations and standards meant to give transparency, provide predictability, and limit market risks,” VARA added.

The VARA cites investor protection concerns as well, although large penalties may make things more difficult for crypto service providers. According to the new legislation, all permitted crypto businesses in Dubai must follow marketing, advertising, and promotion guidelines.

Violations of these criteria will result in fines ranging from $5,500 to $55,000. If a company commits the same offense again within a year, the penalties may be doubled to $135,000.

“The Full Market Product (FMP) Regulations are especially intended to allow for the offering of permitted activities and services to consumers and investors from the Emirate of Dubai,” according to the release.

Notably, the United Arab Emirates was the first worldwide economy to establish a specialized regulator for the virtual asset market. The UAE's Prime Minister and ruler of Dubai, Sheikh Mohammed Bin Rashid, said that the emirate would implement its first legislation controlling cryptocurrency activity in 2022, as well as create an independent regulator to oversee the industry.

In contrast to other financial jurisdictions that have advised crypto enterprises to desist from consumer-oriented marketing, the nation has created a crypto-friendly image.

Dubai is also a popular center for crypto enterprises that face excessive taxes or a strong attitude toward cryptocurrencies in their native country, which might pave the way for the city to attract additional business.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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