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According to reports, the Securities and Commodities Administration (SCA) of the United Arab Emirates has announced that it will begin accepting license applications from companies

Overview

According to reports, the Securities and Commodities Administration (SCA) of the United Arab Emirates has announced that it will begin accepting license applications from companies wishing to provide virtual asset services in the country. All virtual asset service providers (VASPs) operating in the country must submit applications and obtain regulatory approval, except for those licensed in the country’s financial freedom zone. Meanwhile, digital asset companies operating within the Emirate of Dubai must still comply with their own financial regulatory authority, the Virtual Asset Services Authority (VARA). These companies also need to apply for and obtain licenses from VARA.

UAE Federal Financial Supervisory Authority Open VASP License Application

The Securities and Commodities Administration (SCA) of the United Arab Emirates (UAE) has declared that it will start taking applications for virtual asset service providers (VASPs) to get licenses in the country. All VASPs operating in the country need to gain regulatory approval except for those that have obtained licenses in the country’s financial freedom zone. Digital asset companies that operate within Dubai must comply with their own financial regulatory authority, namely the Virtual Asset Services Authority (VARA), and are also required to apply for and acquire licenses from VARA.
# Understanding Virtual Asset Services in the UAE
The UAE has been an early adopter of the cryptocurrency and blockchain technology. The widespread use of virtual asset services (VAS) in the country has mandated the need for a regulatory authority to monitor and regulate these activities to put a check on activities like money laundering and terrorist financing. The regulatory framework for VASPs in the UAE is in line with international standards and ensures the safety of investors and other stakeholders.
# Regulatory Requirements for VASPs Operating in the UAE
The SCA necessitates all VASPs operating in the UAE (except for those licensed in the country’s financial freedom zone) to be licensed and regulated by the regulatory authority. Companies seeking to become licensed VASPs must meet specific requirements stipulated by the regulatory authority. These requirements are intended to ensure that VASPs maintain high levels of transparency, operational efficiency, and security standards. The regulatory authority also stipulates that VASPs register their activities, including record-keeping for transactions, risk assessment, and strategy, to ensure that VASPs are fully accountable and transparent in their activities.
# The Role of VARA in Dubai
VARA is an independent regulatory authority that operates separately from SCA in Dubai. VARA regulates, monitors, and supervises all companies dealing with virtual or digital assets. Companies operating in Dubai, including VASPs, must apply for and obtain licenses from VARA to ensure compliance with regulatory authority. Companies need to submit proof of financial standing, business plan, proof of sources of funding and management experience. VARA also conducts audits to verify that companies maintain the requisite standards.
# Conclusion
The UAE has been an early adopter of blockchain and cryptocurrency technology. The regulatory framework for VASPs in the country ensures transparency and accountability, making it easier to monitor and mitigate risks associated with virtual asset services. VASPs operating in the UAE must be licensed and regulated by the regulatory authority, except those that are licensed in the financial freedom zone. Companies in Dubai, including VASPs, must obtain licenses from VARA to meet regulatory requirements for digital assets.
# FAQs
Q: What is the regulatory framework for virtual asset services in the UAE?
A: The regulatory framework for virtual asset services in the UAE ensures transparency and accountability and is in line with international standards.
Q: What are the requirements for VASPs seeking to be licensed in the UAE?
A: VASPs seeking to be licensed in the UAE must meet specific requirements stipulated by the regulatory authority, including maintaining transparency, operational efficiency, and high security standards.
Q: What is the role of VARA in Dubai?
A: VARA is an independent regulatory authority that regulates, monitors and supervises companies dealing with virtual or digital assets in Dubai. Companies in Dubai, including VASPs, must get a license from VARA to comply with regulatory authority.

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