UAE Starts Accepting Licensing Applications for VASPs
- All virtual asset service providers (VASPs) in the UAE are now required to submit a licensing application with the Securities and Commodities Authority.
- Firms that have already acquired a license in the UAE’s financial free zones will be exempted from the requirement, but those in Dubai will still need to apply with the SCA.
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The securities regulator of the United Arab Emirates (UAE) has started accepting licensing applications from firms looking to provide crypto services within the country, the regulator said in a press release on 17 April.
According to the announcement, all virtual asset service providers (VASPs) that operate in the UAE — with the exception of those licensed in the financial free zones — are now required to receive a license from the country’s Securities and Commodities Authority (SCA). VASPs that wish to receive authorization from the regulator will have to demonstrate “operational efficiency and flexibility”, in addition to meeting certain operational standards.
The SCA clarified that crypto companies that operate in the emirate of Dubai — which last year established its own licensing framework — will still have to receive the approval of the country’s securities regulator, in addition to the license from the Dubai Virtual Asset Regulatory Authority (VARA).
The UAE’s Council of Ministers issued resolution number 111 back in December 2022, which aimed to provide an “attractive investment, economic and financial environment for global companies and institutions operating in the virtual asset sector”. The Monday press release, however, revealed that some amendments had been made to the rule book, and that crypto brokerage and custody, as well as a new category of VASP, were added to the legislation.
The SCA officially became the one in charge of regulating and supervising the crypto sector back in February, noting that its mission was to “ensure the protection of investors’ funds in virtual assets from illegal practices”. The regulator also explained that it will be in charge of transactions related to virtual assets for investment purposes, while crypto used for payment purposes will be under the jurisdiction of the UAE’s central bank.
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Deutsche Bank headquarters in Beijing, China on April 3, 2019. Shutterstock
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