Tamimi lawyers shed light on Dubai’s Virtual Asset Regulation Law
Dubai Ruler, Sheikh Mohammed bin Rashid Al Maktoum, Vice President, and Prime Minister, recently issued the Dubai Virtual Asset Regulation Law aimed at creating an advanced legal framework to protect investors and designing international standards for virtual assets (VA) industry governance that will promote responsible business growth, under prudential regulations.
The Dubai Virtual Asset Regulatory Authority (VARA) will be responsible for licensing and regulating the sector across Dubai Mainland and Free Zone territories (exclusive of DIFC).
To shed more light on the issue, in an interview with Economy Middle East, Divya Abrol Gambhir, Partner, Banking & Finance at Al Tamimi & Company said:
“The law is yet to be published in the official gazette and will come into force on its publication in the Official Gazette for Dubai. The scope of the Law is to cover virtual asset activities conducted in the Emirate of Dubai.”
Is there a sense in which certain virtual assets are, or are not, included in the remit of the new Dubai VARA?
“VARA has been empowered to issue implementing decisions and these will provide clarity on the scope of the activities and virtual assets covered. The law broadly indicates virtual assets comprise; a “digital representation of value which can be digitally traded or transferred, or used as an exchange or payment tool, or for investment purpose”. The Law is newly issued, and we expect clarity in the coming days as to whether issuance and trading of crypto assets like utility tokens and NFTs (that are generally not categorized as securities) would also be covered.”
What can be inferred from the fact that the FSRA, the SCA, Dubai ‘onshore’, and the DFSA each appear to be issuing their own set of VA regulations?
“This simply reflects the unique nature of the UAE financial regulatory framework. We have been working with multiple financial regulatory regimes and their regulators for several years now and they do communicate and cooperate with each other, so we don’t believe this law will cause any confusion in the long term.”