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Author

Abdul Azeem

LLB (Hons) LLM

Secure Virtual Asset Operations in Dubai

The virtual asset landscape is booming, and Dubai is at the forefront of this revolution. To ensure a secure and thriving ecosystem, the Dubai government established the Virtual Assets Regulatory Authority (VARA). Here’s a breakdown of what VARA is, why it’s important for companies, and how our lawyers in Dubai can assist you with navigating the registration process.

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What is VARA and Why is it Important?

VARA acts as the central regulatory body for virtual assets in Dubai. It establishes a clear framework for businesses operating in this space, promoting innovation while safeguarding consumers and market integrity. Here’s why VARA registration is crucial for companies:

  • Legality and Trust: Obtaining a VARA license signifies your business operates legally within the Dubai virtual asset market. This builds trust with investors, partners, and customers.
  • Enhanced Security: VARA regulations ensure robust cybersecurity measures and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) protocols, minimizing financial risks for your business.
  • Competitive Advantage: A VARA license demonstrates your commitment to industry best practices, giving you a competitive edge in the global virtual asset market.
  • Clear Regulatory Landscape: VARA provides clear guidelines for operating within the virtual asset space, eliminating ambiguity and boosting operational efficiency.

Who Should Consider VARA Registration?

  • Cryptocurrency exchanges
  • Custodial wallet providers
  • Initial Coin Offering (ICO) facilitators
  • Virtual asset advisory services
  • Broker-dealer services for virtual assets
  • Lending and borrowing platforms for virtual assets
  • Virtual asset management and investment firms

The Benefits of Registering with VARA

  • Market Access: A VARA license grants you the authorization to operate legally in the Dubai virtual asset market, unlocking a vast pool of potential customers and investors.
  • Investor Confidence: VARA compliance demonstrates your commitment to transparency and responsible business practices, attracting investors seeking secure and regulated partners.
  • Streamlined Operations: VARA provides clear regulations, eliminating operational uncertainties and facilitating smooth business conduct.
  • Future-Proofing: As the virtual asset industry evolves, VARA ensures your business remains compliant with evolving regulations.

A Rundown of the VARA Registration Process

  1. Initial Consultation: We’ll discuss your business model and virtual asset activities to determine your registration needs, and pair you with an industry-specific expert.
  2. License Category Selection: Based on your activities, our expert will recommend the most suitable VARA license category (e.g., Full Operating License, Limited Operating License).
  3. Documentation Preparation: Our expert will assist you in gathering all necessary documents as per your chosen license category.
  4. Application Submission: Our expert will guide you through the application process, including completing the VARA Information Disclosure Questionnaire (IDQ).
  5. Review and Approval: VARA will review your application and may request additional information. Our expert will be at your side throughout this stage.
  6. License Issuance: Upon successful application, VARA will issue your virtual asset license.

A Comprehensive Look at VARA License Categories:

  • Full Operating License: This comprehensive license is ideal for businesses offering a full spectrum of virtual asset services, including:
    • Operating a cryptocurrency exchange platform
    • Providing custodial wallet services
    • Facilitating Initial Coin Offerings (ICOs)
    • Offering money remittance or transfer services involving virtual assets
  • Limited Operating License: This license caters to businesses with a narrower range of virtual asset activities, such as:
    • Operating a virtual asset marketplace (limited to buying and selling)
    • Providing advisory services related to virtual assets
  • Advisory Services: Offering advice related to virtual assets to clients.
  • Broker-Dealer Services: Arranging transactions between clients for buying and selling virtual assets or acting as a dealer for your own account.
  • Custody Services: Safeguarding virtual assets on behalf of clients.
  • Exchange Services: Performing exchange, trade, or conversion of virtual assets and currency, or matching orders between buyers and sellers.
  • Lending and Borrowing Services: Facilitating the lending and borrowing of virtual assets.
  • Transfer Services: Transferring virtual assets on behalf of clients. (Note: This category might be included under other license types depending on specific activities)
  • Management and Investment Services: Acting as an agent or fiduciary for clients, managing their virtual asset portfolios.

Understanding the Latest VARA Licensing Process

  • Three Applicant Categories: VARA now categorizes applicants based on their status:
    • Category A: Existing MVP applicants currently undergoing a Minimum Viable Product process.
    • Category B: Existing legacy VASPs (Virtual Asset Service Providers) operating in Dubai.
    • Category C: New applicants seeking a license after February 7th, 2023.
  • Application Process: The specific application process depends on your category. Our expert will guide you through the appropriate steps, including completing the Information Disclosure Questionnaire (IDQ) and submitting the required documentation.
  • Timeline Expectations: Our expert will provide a realistic timeline based on your chosen license category and applicant category.

 

How We Can Assist with Your VARA Registration

  • Eligibility Assessment: We’ll evaluate your business model and determine the most suitable VARA license category for your needs.
  • Documentation Preparation: We’ll assist you in compiling and meticulously reviewing all required documents for a smooth application process.
  • Compliance Framework Development: We’ll collaborate with you to build a robust compliance framework exceeding VARA’s standards, encompassing AML/CFT protocols, cybersecurity measures, and data protection practices.
  • Liaison with VARA: We’ll act as your dedicated liaison, handling communication and inquiries with VARA on your behalf, ensuring a seamless application process.

Ready to Navigate the VARA Landscape with Confidence?

With our portal panel of experts guidance and comprehensive support, VARA registration can be a smooth and efficient process. Contact us today to schedule a consultation and discuss how we can empower your business to thrive in the dynamic Dubai virtual asset market.

24justice.ae VARA Registration Page
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