Key Cooperation Agreement Between SCA and VARA
On September 5, 2024, a significant cooperation agreement was signed between the Securities and Commodities Authority (SCA) and the Virtual Assets Regulatory Authority (VARA), regarding Virtual Assets Service Providers (VASPs) operating in/from Dubai.
Objectives of the Agreement
Under this agreement, the SCA and VARA will set forth rules and procedures for licensing and supervision VASPs and any related activities, services or associated transactions. This is subject to licensing in accordance with the provisions of Cabinet Decision No. 111 of 2022, and No. 112 of 2022 (Regulating Virtual Assets and Their Service Providers) and within the respective jurisdiction of both parties.
This agreement reflects a collective commitment to ensure compliance with anti-money laundering laws. Furthermore, VASPs operating in/from Dubai, or wishing to service the emirate of Dubai will from now on require to obtain a license from VARA, and will be registered by default with the SCA to service the wider UAE.
“SCA and VARA have signed a major agreement to regulate Virtual Asset Service Providers (VASPs) in Dubai, ensuring compliance with AML laws and establishing clear licensing rules.”
About the Authorities Involved, SCA and VARA:
Securities and Commodities Authority (SCA):
The SCA, together with the Central Bank of the UAE, regulates the national virtual assets framework. Licenses offered include:
- Virtual Asset Platform Operator
- Custody of Virtual Assets
- Financial Consulting
- Portfolio Management
- Virtual Asset Broker
- Virtual Asset Dealer
Virtual Assets Regulatory Authority (VARA):
VARA is responsible for regulating Dubai’s virtual assets ecosystem. Its license categories include:
- Advisory Services
- Broker-Dealer Services
- Custody and Exchange Services
- Lending and Borrowing
- Investment Management
- Transfer and Settlement
- Issuance (Category 1)
This partnership represents a significant advancement in the creation of a secure and efficient virtual assets ecosystem, underscoring the UAE’s dedication to innovation and excellence in financial regulation. We look forward to providing further details on the scope of this agreement in the near future.
Official Announcement and Next Steps
The announcement can be found here: https://www.sca.gov.ae/en/media-center/news/9/9/2024/sca-and-vara-set-regulatory-framework-for-the-uaes-virtual-assets-sector-in-boost-to-the-countrys-.aspx