The Introduction of New Regulations by VARA
The Virtual Assets Regulatory Authority (VARA) in Dubai has set a compliance deadline of June 19 for virtual asset service providers (VASPs) to adhere to the newly updated Version 2.0 of its activity-based Rulebooks. Announced on May 19, these regulations are part of VARA’s ongoing efforts to enhance the integrity of the cryptocurrency market and improve oversight of associated risks.
Key Updates in Version 2.0
Version 2.0 introduces more rigorous requirements across several domains, including:
- Advisory services
- Brokerage
- Custody solutions
- Exchanges
- Lending and borrowing operations
- Asset management
- Transfer and settlement services
Included in the updates are stricter controls on margin trading and the distribution of tokens, alongside clearer guidelines related to collateral wallet structures and uniform compliance duties applicable to licensed activities. To facilitate this transition, VARA has provided a 30-day period during which VASPs can adapt their operations.
Statements from VARA Officials
As part of their commitment to fostering innovation within a framework of compliance, Ruben Bombardi, the General Counsel and Head of Regulatory Enablement at VARA, emphasized the importance of these rule updates in establishing a solid foundation for a responsible and scalable ecosystem.
Historical Context and Future Initiatives
This move parallels VARA’s previous actions, including a significant crackdown in October of the previous year, when the authority penalized seven unauthorized crypto entities with fines ranging from 50,000 to 100,000 AED, alongside orders to cease operations and marketing of virtual asset services. In a related initiative earlier this year, VARA revealed plans to require VASPs to disclose the identities of significant cryptocurrency holders, often referred to as “crypto whales”, aiming to increase transparency in the market.
