Crypto License in Dubai
Dubai’s Virtual Assets Regulatory Authority (VARA) is the sole regulator for virtual asset activities throughout Dubai (including all free zones and development zones, but excluding the Dubai International Financial Centre) under Dubai Law No. 4 of 2022. All Virtual Asset Service Providers (VASPs) in Dubai must be licensed by VARA, and no person may conduct regulated virtual asset business in Dubai without VARA authorization.
VARA has implemented a full regulatory framework (“Full Market Product” regime) comprising a VARA Regulations 2023 rulebook and multiple detailed rulebooks. Mandatory Rulebooks (applicable to all VASPs) cover Company governance, Compliance & Risk management, Technology & Information security, and Market Conduct. In addition, Activity-Specific Rulebooks set tailored requirements for each category of licensed virtual asset activity (e.g. advisory, brokerage, custody, exchange, lending, investment management, transfer services, and issuance).
VARA’s framework defines seven primary categories of regulated virtual asset activities (Advisory Services; Broker-Dealer Services; Custody Services; Exchange Services; Lending & Borrowing Services; Virtual Asset Management & Investment Services; and VA Transfer & Settlement (Payments/Remittances) Services). Engaging in any of these activities “by way of business” in Dubai is prohibited without a VARA license. VARA’s rules clarify that any entity undertaking such activity must obtain VARA authorization (or a specific exemption) before operating.
Licensed VASPs must meet strict governance requirements under VARA’s Company Rulebook. This includes maintaining an appropriate Dubai-based corporate structure, a board and senior management that pass fit-and-proper tests (integrity, competence, solvency, etc.), and clear internal controls. VASPs must appoint key responsible officers (e.g. compliance, risk, finance) and are ultimately accountable for effective internal systems and controls. VARA requires that the Board and senior management ensure compliance and will hold them responsible for the firm’s adherence to rules.
VARA’s Compliance & Risk Management Rulebook mandates that VASPs implement robust internal compliance programs. VASPs must have policies and procedures addressing anti-money laundering (AML) and counter-terrorist financing (CFT) consistent with UAE federal AML/CFT laws, risk assessment processes for all products and services, client due diligence measures, transaction monitoring, and ongoing risk reporting to VARA. VARA coordinates with the UAE Central Bank and Securities & Commodities Authority (SCA) to ensure VASPs also meet all applicable federal AML/CFT obligations.
Dubai’s rules place heavy emphasis on market integrity and consumer protection. The Market Conduct Rulebook and VARA Regulations prohibit deceptive marketing, insider trading, market manipulation, and unfair practices. VASPs cannot trade on their own account against clients or engage in insider dealing with virtual assets. There are detailed requirements for client disclosures (clear risk warnings, fee transparency), client agreements, and complaints handling procedures. VASPs must classify clients (e.g. retail vs. professional) and ensure suitability of products for the client’s profile – for example, advisory VASPs must assess each virtual asset’s appropriateness for the client’s investment objectives before recommending it.
VARA imposes minimum capital and solvency standards. Every VASP must maintain a Paid-Up Capital above specified thresholds, which vary by activity type (e.g. Advisory firms require at least AED 100,000; Exchange providers up to AED 1,500,000 or 25% of annual expenses, among other tiered requirements). VASPs undertaking multiple activities must meet the sum of capital requirements for each. Required capital must be held in trust in a UAE bank (with VARA as beneficiary) or via an approved guarantee, ensuring funds are available to protect clients. VASPs must also maintain liquid reserve assets and insurance coverage as directed by VARA to mitigate operational and custody risks.
VARA directly regulates issuance of new virtual assets or tokens in Dubai. The VA Issuance Rulebook requires issuers to obtain VARA approval or no-objection for any public token offering and to publish full disclosure documents (white papers) meeting VARA’s content standards. Privacy coins (anonymous cryptocurrencies) are expressly prohibited – VARA bans the issuance of any “Anonymity-Enhanced Cryptocurrency” and any business related to such assets in Dubai. VARA retains power to classify any digital asset as a regulated “virtual asset” (or to deem certain tokens out of scope, such as Central Bank-issued digital currency or certain utility tokens, as appropriate).
VARA’s Marketing, Advertising and Promotions Regulations 2024 apply to all marketing of virtual assets in or from Dubai. Only VARA-licensed entities (or their authorized agents) may advertise or promote virtual asset services, and all promotional content must comply with VARA’s standards (fair, not misleading, with required risk disclaimers). Marketing of privacy coins or related services is strictly forbidden in Dubai. Promotions targeting UAE investors from abroad are also covered, requiring that foreign issuers or platforms ensure compliance if their marketing reaches Dubai. VARA’s marketing rules also regulate social media “influencers” and events – for example, crypto promotional events in Dubai require VARA approval.
VARA actively supervises licensed VASPs through periodic examinations, required reports, and on-site inspections. The VARA Regulations grant the authority broad enforcement powers, including the ability to impose fines, penalties, and license suspensions or revocations for non-compliance. VARA has published a schedule of fines for specific violations (e.g. unauthorized activities, inadequate disclosure, AML breaches, etc.), with significant monetary penalties per violation. VARA may also issue remedial directives, public censure, or refer matters for criminal prosecution where laws are violated. All VARA-authorized firms are subject to ongoing reporting obligations (financial statements, audit reports, incident notifications) to facilitate continuous oversight.
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Licentium is a specialized platform that connects crypto-asset issuers and service providers with an international network of lawyers, regulatory consultants, and former supervisors. Projects can map applicable rules in key jurisdictions through a single interface, obtain jurisdiction-specific launch advice, arrange the drafting of white papers and licensing applications, and schedule ongoing compliance health-checks. The platform’s curated expert pool spans financial services, data protection, and corporate law, enabling founders to address cross-border requirements—from MiCA in the EU to securities, AML, and consumer-protection regimes elsewhere—within coherent project timelines and budgets.
