UAE financial watchdog announced On April 17, we announced that we began accepting applications from businesses seeking a Virtual Asset Service Provider (VASP) license.
The UAE Cabinet has established a framework to regulate the cryptocurrency industry in December 2022 after passing Resolution 111.
Under the new regime, any company wishing to offer services related to virtual assets in the country will have to register with the national financial regulator and secure a VASP license.
However, companies operating within Dubai’s financial free zone do not currently need to apply for a VASP license.
The Securities and Commodities Authority (SCA) has been appointed to oversee the UAE’s cryptocurrency sector. The UAE has historically held a pro-crypto stance and remains at the forefront of regulating emerging industries.
Its oversight overlaps slightly with the Virtual Assets Regulatory Authority (VARA), which remains responsible for cryptocurrency companies operating in Dubai and financial free zones such as the Dubai International Financial Center (DIFC).
A VASP license places companies under the SCA’s web and requires them to comply with various regulatory requirements related to business disclosure, operational integrity, consumer protection and transparency.
According to the SCA, companies must submit all documents and data requested during the licensing process and are subject to disclosure requirements.
If the application is denied, the company can appeal the decision.
Additionally, SCA regulates all cryptocurrencies and digital assets used for investment purposes. However, this does not include digital assets used for payment purposes under the jurisdiction of central banks, according to regulators.
After the United Arab Emirates mandated VASP licenses for cryptocurrency companies, it began accepting applications that first appeared on CryptoSlate.