Dubai's Crypto Regulations: A Tug of War between Rigor and Opportunities
Summary:
Dubai's Virtual Assets Regulatory Authority (VARA) has implemented comprehensive prerequisites for the crypto sector, receiving positive feedback from professionals in licensing, despite the extensive process. Tao Xiao, managing partner of NH Management, emphasized the importance of adherence to Anti-Money Laundering and Know Your Customer regulations throughout the licensing procedure which can take up to a year. Sam Blatteis, CEO of The MENA Catalysts, underlined the potential of establishing a company in Dubai, likening its rapid growth in crypto to Silicon Valley's tech evolution. Chainlink co-founder, Sergey Nazarov, also praised Dubai's progressive regulations and conducive environment for the crypto industry.
Dubai's Virtual Assets Regulatory Authority (VARA) has implemented extensive prerequisites for the crypto sector, a move that has been well-received by professional license workers, despite the lengthy procedures involved. Involved licensing specialists shared their opinions on Dubai's licensing protocols and statutes with Cointelegraph.
Tao Xiao, NH Management's managing partner, conveyed to Cointelegraph that the duration for obtaining VARA's crypto license could be a year. According to Xiao, previously an employee of the Dubai’s Chamber of Commerce, the procedure requires exceptional attention to detail and strict adherence to compliance protocols. "The path to acquiring the necessary licenses requires perseverance and vigilance because each aspect of the business is subjected to intense scrutiny to assure adherence to Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations,” Xiao explained. He also added that the rigorous regulatory structure of Dubai signifies the seriousness with which they strive to maintain market reliability and protect interests of investors.
In the year 2022, the Financial Action Task Force (FATF) added the UAE to its "grey list" for jurisdictions under enhanced supervision. After finding its place on the list, the UAE reinforced its existing statutes and guidelines to fight money laundering and was subsequently removed from the FATF's grey list in February 2024. Hence, the country is now free from any extra scrutiny by the international financial watchdog FATF. Despite the complexity of compliance, Xiao perceives substantial benefits of acquiring licenses in Dubai. "Presently, several projects are waiting for VARA licensing, implying that meeting the criteria doesn't guarantee consent… However, it’s important to understand VARA's goal is not to create barriers but to ensure the investors' protection and overall market safety,” Xiao pointed out. He also highlighted the benefits of having businesses located in Dubai including global market access, advantageous tax policies and a conducive environment for fintech innovations.
Echoing Xiao’s sentiments, Sam Blatteis, CEO and co-founder of government affairs firm The MENA Catalysts, underscored why establishing a company in Dubai is a worthwhile decision. Blatteis stated, “The government is steadily positioning crypto similar to what Silicon Valley did with tech. Rapidly, the nation is becoming the crypto world’s equivalent to Coachella.” The CEO highlighted UAE’s untapped potential, despite the country’s modest size. Blatteis advised businesses seeking to expand into the UAE to consider a "strategic recalibration" and look into the experiences of those who've already navigated these waters. He added that firms should consider people who have not only worked on the legalities, but also those who have established successful relationships with important authorities.
In another conversation with Cointelegraph during Token2049, Chainlink co-founder Sergey Nazarov revealed his high regard for Dubai and the UAE. He cited the region's progressive regulations and its attraction for global firms as a suitable place to transact, establish businesses and assemble teams. Conclusively, he noted that Dubai's government, regulators, legal framework and economic setting are highly appealing to the crypto industry.
Published At
4/29/2024 11:47:30 AM
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