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UAE regulators strengthen oversight to enhance crypto hub status

UAE regulators strengthen oversight to enhance crypto hub status

GrafaGrafa2024/09/12 05:45
By:Liezl Gambe

The United Arab Emirates (UAE) is making strides to solidify its position as a leading hub for virtual assets. 

The Securities and Commodities Authority (SCA) and the Virtual Assets Regulatory Authority (VARA) have signed a cooperation agreement to enhance the regulatory framework for virtual asset service providers (VASPs) operating in the country. 

This partnership aims to establish licensing requirements, create mutual supervision mechanisms, and foster a stable and regulated virtual assets sector in the UAE.

The agreement stipulates that any VASP operating in or targeting the Dubai market must obtain a license from VARA. 

Once approved, the VASP is also authorised to operate across the wider UAE under the supervision of the SCA. 

VASPs wishing to operate in any other emirate must seek licensing directly from the SCA. 

This joint oversight framework ensures a unified regulatory approach while maintaining distinct responsibilities for each regulatory body.

Speaking at the signing ceremony, Mohamed Ali Al Shorafa, Chairman of the SCA, emphasized the importance of collaboration in establishing effective regulatory frameworks. 

He stated, “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.”

VARA Chairman Helal Al Marri described the partnership as a milestone in regulatory cohesion across the UAE. 

Marri highlighted that this collaboration "allows for seamless and efficient portability of regulated services while ensuring uncompromised market risk assurance across the UAE."

Under this agreement, the SCA and VARA will jointly set the rules and procedures for licensing and supervising VASPs. 

The measures will align with Cabinet Decision No. 111 of 2022 and No. 112 of 2022, which regulate virtual assets and their service providers.

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