“We strive to establish effective frameworks in cooperation with our partners to foster the growth and stability of the virtual assets sector in the UAE, thus ensuring the enforcement of anti-money laundering legislation and bolstering confidence in the UAE’s investment ecosystem,” HE Mohamed Ali Al Shorafa.
“Today marks a pivotal milestone, demonstrating regulatory cohesion across the UAE, driving forward our shared vision for a robust, secure and interoperable virtual assets ecosystem. The strength of our collaboration with federal partners like SCA, allows for seamless and efficient passportability of regulated services, while assuring uncompromised market risk assurance across the UAE. This reflects our collective commitment to enabling Responsible Innovation, upholding the highest standards in cross-border compliance and investor protection,” HE Helal Al Marri.
Abu Dhabi, 5 September 2024: The Securities and Commodities Authority (SCA) signed a cooperation agreement with Dubai’s Virtual Assets Regulatory Authority (VARA) to bolster the UAE’s position as a leading global hub for virtual assets, in alignment with the ‘The Principles of the 50’ and the government’s visionary aspirations to build the world’s best and most dynamic economy.
The signing ceremony, which took place at the SCA’s Dubai branch, was attended by His Excellency Mohamed Ali Al Shorafa, the SCA’s Chairman, and His Excellency Helal Saeed Al Marri, Chairman of VARA’s Executive Board. The agreement was signed by Her Excellency Dr. Maryam Buti Al Suwaidi, the SCA’s CEO, and Mr. Matthew White, VARA’s CEO, in the presence of senior officials from both organisations.
Following the signing, HE Al Shorafa stressed on the importance of cooperation between different regulatory authorities across the nation to attract global businesses and organisations to operate within its dynamic financial sectors, including that of virtual assets. He indicated that investing in virtual assets continues to see substantial interest and exponential growth, which required joint efforts to build unified and effective frameworks that promote sustainable development and bring stability to this vital sector.
HE Al Shorafa remarked that the cooperation agreement signed with Dubai’s VARA is aligned with the government’s directives to regulate the local virtual assets sector, control its activities, and enhance overall monitoring to protect investors. It also ensures compliance with local anti-money laundering regulations as well as those related to the financing of terrorism and illegal organisations, which boosts investor confidence in the UAE and its resilience in the face of global challenges.
For his part, HE Al Marri commented that this agreement underscores a joint national commitment to leveraging regulations as an enabler to secure business enablement within the Virtual Assets ecosystem, so that the global industry can sustainably evolve to becoming a cornerstone for the New Economy. Dubai’s 2033 Economic Agenda has outlined a defined roadmap to becoming the global hub for tomorrow’s Innovation economy – and such regulatory collaboration and clarity is foundational to assuring consumers, investors, and the international business community, of the UAE’s position as a world-leading hub for the Future of Finance.
Under the agreement, the SCA and VARA will set forth rules and procedures for licensing and supervision virtual asset service providers (VASPs) and any related activities, services or associated transactions. This is subject to licensing in accordance with the provisions of Cabinet Decision No. 111 of 2022, and No. 112 of 2022 (Regulating Virtual Assets and Their Service Providers) and within the respective jurisdiction of both parties.
Licensing of VASPs
The two parties agreed that VASPs operating in/from Dubai, or wishing to service the emirate of Dubai require to obtain a license from VARA, and can be registered by default with the SCA to service the wider UAE. VASPs wishing to operate out of any other Emirates, must be licensed by the SCA to do so.
The agreement covers the mechanism for mutual supervision of VASPs, penalty and fine imposition, the exchange of information and statistics, as well as cooperation in employee training and qualification.
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About the SCA’s role in regulating the UAE’s virtual assets sector
In accordance with the Cabinet Decision No. 111 of 2022, the SCA undertook the responsibility of overseeing, supervising, and regulating the virtual assets sector in the UAE, including in free zones, to enhance the sector’s legislative framework, associated activities, and service providers to protect the rights and duties of all parties involved and ensure compliance with the applicable international obligations.
About the Virtual Assets Regulatory Authority in Dubai
The Virtual Assets Regulatory Authority (VARA), established in March 2022 under Law No.4 of 2022, is responsible for regulating, supervising, and overseeing virtual assets and related activities across Dubai, including Special Development Zones and Free Zones, excluding the Dubai International Financial Centre.
VARA is instrumental in developing Dubai's advanced legal framework for virtual asset industry governance, focusing on investor protection, and supporting a borderless economy vision.
For more information, visit www.vara.ae