UAE’s Regulator Begins License Issuance; Bybit Opens Shop In Dubai
The United Arab Emirates (UAE), through the federal financial watchdog, has introduced another licensing regime for companies looking to offer virtual asset services in the country. However, the new licensing application is set to continue along with the one issued by Dubai’s Virtual Asset Regulatory Agency (VARA).
Application For Regulatory License
The Securities and Commodities Authority (SCA) stated in a press release that all virtual asset service providers (VASPs) doing business in the UAE must apply for and obtain an operating license. According to the regulator, the new licensing regime excludes those VASPs already registered in the country’s free zones.
On the other hand, digital asset firms operating within Dubai will continue to comply with the rules outlined by VARA. In addition, these service providers must also apply for and register with VARA before working within the jurisdiction.
Last December, the UAE’s Cabinet reportedly released resolution 111 of 2022 to oversee virtual assets entities’ activities to prove an investor-friendly environment for global players operating or willing to operate in the digital asset space. Moreover, after the cabinet’s resolution in February, the SCA officially announced that the agency had been empowered to regulate and supervise the digital asset space.
As revealed by the financial regulator, the directive is to ensure investor protection in the crypto space against illicit financial dealings. According to the SCA, the latest resolution applies to all crypto-related transactions done for investment purposes and the UAE’s non-financial free zones.
The regulator, however, noted that there are some limitations to the resolution. The SCA explained that its provisions did not cover digital assets used for payments because they are subject to the central bank’s powers.
In addition, they also do not apply to the financial free trade areas. Irina Heaver, the UAE-based blockchain attorney, revealed in a January 13 interview the effects of the new federal law targeted at cryptocurrency.
According to the lawyer, the failure of any crypto firm to comply with the regulations could result in hefty fines of up to $2.7 million (or 10 million AED), as well as a seizure of the firm’s funds and a criminal probe by the government.
Bybit Opens Global Head Office In Dubai
Close to a year after revealing its plans to open shop in the UAE following the approval in principle to move its global headquarters to the region, Bybit has announced that the project is now complete as the company now has a physical presence in Dubai.
The crypto exchange noted that it had moved its corporate head office to the UAE due to the country’s progressive digital asset regulations.
In addition, the exchange, through its CEO and co-founder Ben Zhou, stated that Dubai is the leading digital asset hub in the MENA region and the world and is well positioned to expand the opportunities by Bybit. Recall that the recent crypto winter saw most digital asset companies struggle to stay in business, and Bybit was one of them.
Bybit was forced to lay off significant staff members as part of its restricting move. Furthermore, the firm faced a derivatives trading ban in Brazil and fines in Canada over alleged violations of the country’s fintech regulations.
As one of the seven emirates making up the UAE, Dubai has been aspiring to become the leading crypto hub in the region. Several of the world’s top digital financial companies have already established their operations in the country.
Meanwhile, observers point to the emirate’s favorable regulations supervised by VARA to enforce compliance and ensure investor protection. Moreover, the country’s massive investments in crypto, blockchain, and Web3 technology have seen oversea startups moving to set up shop in the region.
Meanwhile, despite the global regulatory uncertainty in the crypto space, the Dubai crypto industry has continued to flourish as authorities introduce new guidelines and update existing ones for the fledgling sector.
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