The
Securities and Commodities Authority (SCA), which oversees financial markets in
the United Arab Emirates (UAE), announced this week that it has begun accepting
license applications for cryptocurrency services.
This
follows the approval of regulations governing the market and is another step
towards making the UAE an ‘Oasis’ for digital asset companies.
In 2022,
the UAE Cabinet passed Resolution No. 111, which granted the SCA authority to
issue decisions governing virtual asset transactions and license virtual asset
service providers (VASPs).
All
UAE-based companies offering virtual asset services, except those licensed to
operate in economic-free zones, must adhere to the SCA’s decisions and submit
their license applications. In Dubai, companies must apply to the Virtual
Assets Regulatory Authority (VARA) and seek SCA approval through a standardized
process designed to streamline licensing.
“Article
3 of the regulations prohibits virtual asset trading in the UAE unless the
assets are listed on the official virtual asset platform operators licensed by
the SCA or the relevant authority,” the SCA commented in an official
statement on its website.
Article 4
outlines the functions of virtual asset platform operators, while Article 5
details their obligations in seven areas, including operational efficiency,
resilience, integrity, transparency, professional conduct, virtual asset
protection, compliance, discipline measures, systems and procedures, and access
regulation.
Article 6
empowers the SCA to request documents or data from virtual asset platform
operators and to perform supervisory, investigative, oversight, and inspection
functions. Grievances against SCA decisions can be filed according to Article
7, following established controls.
Legislative
changes have been made to the Financial Activities Rulebook, introducing new
financial activities, such as virtual asset brokers, custodians, and platform
operators.
RAK Digital Assets Oasis
Opens its Doors
In
February, it was announced that Ras Al Khaimah (RAK), one of the emirates that
constitute the UAE, would establish the world’s first free economic zone
dedicated entirely to virtual assets and digital firms.
This zone,
named RAK Digital Assets Oasis, will provide a dedicated area exclusively for
service providers of digital assets and cryptocurrencies working in emerging
sectors like Blockchain, NFTs, DApps, DAOs, and Web3-related ventures. The
Oasis has now opened for applications and is the only free zone of its kind
globally.
“We
are building the free zone of the future for the companies of the future,”
Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, the Chairman of RAK Digital
Assets Oasis, commented.
“As the
world’s first free zone solely dedicated to digital and virtual asset
companies, we look forward to supporting the ambitions of entrepreneurs from
around the world with our progressive, supportive, and quick-to-adapt approach
and our innovation-enabling environment,” the Chairman added.
The UAE’s
expanding significance in the realm of cryptocurrency is evident from the surge
in digital asset firms seeking local licenses. For instance, CAPEX.com, a
leading retail brokerage brand, was granted in-principle approval for a
cryptocurrency license by Abu Dhabi Global Markets (ADGM), the country’s
regulator, in November 2022.
Previously, licenses of a similar nature were
secured by the cryptocurrency exchange, Kraken, the social trading platform, eToro, SEBA
Bank which is focused on cryptocurrency, and the world’s largest crypto
exchanges, Binance and Crypto.com.
The
Securities and Commodities Authority (SCA), which oversees financial markets in
the United Arab Emirates (UAE), announced this week that it has begun accepting
license applications for cryptocurrency services.
This
follows the approval of regulations governing the market and is another step
towards making the UAE an ‘Oasis’ for digital asset companies.
In 2022,
the UAE Cabinet passed Resolution No. 111, which granted the SCA authority to
issue decisions governing virtual asset transactions and license virtual asset
service providers (VASPs).
All
UAE-based companies offering virtual asset services, except those licensed to
operate in economic-free zones, must adhere to the SCA’s decisions and submit
their license applications. In Dubai, companies must apply to the Virtual
Assets Regulatory Authority (VARA) and seek SCA approval through a standardized
process designed to streamline licensing.
“Article
3 of the regulations prohibits virtual asset trading in the UAE unless the
assets are listed on the official virtual asset platform operators licensed by
the SCA or the relevant authority,” the SCA commented in an official
statement on its website.
Article 4
outlines the functions of virtual asset platform operators, while Article 5
details their obligations in seven areas, including operational efficiency,
resilience, integrity, transparency, professional conduct, virtual asset
protection, compliance, discipline measures, systems and procedures, and access
regulation.
Article 6
empowers the SCA to request documents or data from virtual asset platform
operators and to perform supervisory, investigative, oversight, and inspection
functions. Grievances against SCA decisions can be filed according to Article
7, following established controls.
Legislative
changes have been made to the Financial Activities Rulebook, introducing new
financial activities, such as virtual asset brokers, custodians, and platform
operators.
RAK Digital Assets Oasis
Opens its Doors
In
February, it was announced that Ras Al Khaimah (RAK), one of the emirates that
constitute the UAE, would establish the world’s first free economic zone
dedicated entirely to virtual assets and digital firms.
This zone,
named RAK Digital Assets Oasis, will provide a dedicated area exclusively for
service providers of digital assets and cryptocurrencies working in emerging
sectors like Blockchain, NFTs, DApps, DAOs, and Web3-related ventures. The
Oasis has now opened for applications and is the only free zone of its kind
globally.
“We
are building the free zone of the future for the companies of the future,”
Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, the Chairman of RAK Digital
Assets Oasis, commented.
“As the
world’s first free zone solely dedicated to digital and virtual asset
companies, we look forward to supporting the ambitions of entrepreneurs from
around the world with our progressive, supportive, and quick-to-adapt approach
and our innovation-enabling environment,” the Chairman added.
The UAE’s
expanding significance in the realm of cryptocurrency is evident from the surge
in digital asset firms seeking local licenses. For instance, CAPEX.com, a
leading retail brokerage brand, was granted in-principle approval for a
cryptocurrency license by Abu Dhabi Global Markets (ADGM), the country’s
regulator, in November 2022.
Previously, licenses of a similar nature were
secured by the cryptocurrency exchange, Kraken, the social trading platform, eToro, SEBA
Bank which is focused on cryptocurrency, and the world’s largest crypto
exchanges, Binance and Crypto.com.