Virtual Asset Regulatory Authority in the emirate of the United Arab Emirates is called VARA. This will monitor, control and regulate all kinds of Virtual Asset and Cryptocurrency related businesses in UAE. The authority will be issuing licenses to individuals and firms for conducting virtual asset-based transactions and business. It will be also responsible for the promotion and development of intellectual property and virtual assets activities in the country.
Who Controls VARA?
Dubai World Trade Centre Authority will be the parent company of VARA ( Virtual Assets Regulatory Authority ). The aim of the new entity is to protect investors in the virtual asset business. It will also establish international norms for controlling the sector.
The new law to regulate virtual assets is the first one of its kind in the country. His Highness Sheikh Mohammed Bin Rashid Al Maktoum – Vice President and Prime Minister of UAE and Ruler of Dubai approved the law in March 2022. As per his highness – the law is for UAE to participate in designing the future of virtual assets globally.
The ultimate authority to control all financial transactions and business in the UAE including digital and virtual assets is UAE’s Central Bank.
How does VARA work?
UAE will provide the most advanced system for the virtual asset ecosystem for the governance, organization, and also, security of the assets and investors.
VARA will issue licenses to Individuals and Firms to serve as virtual assets service providers. This is to make sure that the personal data of the beneficiaries are safe.
This will also monitor various aspects of the Virtual Asset market such as management and operation of the virtual asset platform. It will also regulate and oversee custody, transfer, exchanges, etc. of all kinds of virtual assets including cryptocurrencies.
VARA aims to act as a global leader in the segment and will serve as a central custodial authority for the virtual assets-based industry.
Those who violate guidelines including agents and licensed companies will be liable for financial penalties and suspension of service. There may be cancellation of service license too in the case of severe violations.
The Virtual Assets Regulatory Authority License
As per the new law, anyone in the United Arab Emirates needs to get a license to operate a virtual asset business or to provide service related to it. Moreover anyone who violates the law will be liable for hefty fines and imprisonment or both together.
Fine for VARA law violation
The minimum Fine for VARA law violations is AED 200,000. This may go up to 5 million in certain cases. Also, there is a clause of imprisonment as well. This will be a minimum of 6 months in prison.