Animoca Brands Acquires VASP License in Dubai
Animoca Brands has successfully acquired a Virtual Asset Service Provider (VASP) license from Dubai’s Virtual Assets Regulatory Authority (VARA), enhancing its capacity to deliver broker-dealer and asset management functionality to institutional and qualified investors operating in the emirate. This significant development, revealed earlier this week, allows Animoca to extend its operations throughout Dubai, specifically outside the Dubai International Financial Centre (DIFC).
Strategic Focus on Institutional Clients
The decision marks a crucial advancement in the region’s efforts to establish a robust regulatory framework for digital assets, even as authorities tighten regulations on operational protocols within this sector. Yat Siu, the co-founder and executive chairman of Animoca Brands, emphasized the strategic importance of focusing on institutional clients in Dubai, especially as the company’s institutional product offerings, like Real-World Assets (RWAs), have been on the rise.
“The growth of our institutional products necessitates a more pronounced engagement with clients in Dubai,”
Siu explained to Decrypt.
Expanding Presence in the Middle East
Animoca Brands, which oversees a diverse portfolio comprised of more than 600 companies and digital assets, as well as managing platforms such as The Sandbox and Moca Network, views this new license as a reinforcement of its presence in the Middle East.
Regulatory Changes and Compliance
This licensing comes on the heels of a recent directive from Dubai’s DFSA (Dubai Financial Services Authority), which governs the DIFC’s regulatory environment. The DFSA has imposed a ban on licensed exchanges and financial entities from facilitating transactions involving privacy-centric tokens like Monero and Zcash due to concerns surrounding anti-money laundering (AML) and sanctions compliance. Additionally, the DFSA has removed its previous token whitelist, shifting the responsibility for ongoing asset evaluations onto the licensed operators.
The new regulatory framework, effective last month, restricts licensed entities from employing privacy-enhancing technologies—including mixers and tumblers—that obscure transaction details. The DFSA has also refined its definition of “fiat crypto tokens” to exclusively include tokens linked to fiat currencies, ensuring they are backed by high-quality assets capable of handling redemption during market stress, subsequently disqualifying many current stablecoins.
Global Trends in Regulatory Compliance
Nitesh Mishra, co-founder and CTO of the hedging platform ChaiDEX Capital, remarked that the increasing stringency around token and anti-money laundering regulations could actually boost Dubai’s appeal to serious global investors.
“By instituting these clearer rules on transactions and banning privacy tokens in the DIFC, Dubai is promoting a ‘clean capital only’ environment, which aligns with what major funds, banks, and publicly listed corporations are seeking,”
Mishra observed. He noted that the actions of VARA and the DFSA appear to be aligned with global compliance expectations, particularly in light of their goals surrounding FATF adherence and sanction enforcement, while still encouraging innovation in the sector.
This regulatory tightening in Dubai mirrors a broader global trend towards stricter AML measures. For instance, just last month, India’s Financial Intelligence Unit updated its own AML and countering the financing of terrorism (CFT) guidelines, mandating regulated digital asset service providers to prohibit transactions involving privacy tokens and mixers, due to significant concerns about money laundering and financing terrorist activities.
