The Securities and Commodities Authority (SCA), the UAE’s federal financial regulatory agency, has announced that it would accept license applications for companies wishing to offer virtual asset services in the country.
The SCA mandates that all virtual asset service providers (VASPs) in the UAE, with the exception of those already licensed in financial-free zones, must apply for and obtain a license from the regulator.
Dubai-based digital asset firms must adhere to regulations established by the Virtual Asset Services Authority (VARA), a financial regulatory body, and must apply for and successfully obtain a license from VARA.
The Council of Ministers issued Decision No. (111) of 2022, outlining the regulation of virtual assets and their service providers. It assigns the SCA the responsibility of issuing regulations to govern virtual asset transactions and license service providers.
The SCA stated its intention to regulate and supervise the virtual asset sector in accordance with the cabinet resolution on February 1, with the objective of safeguarding investors’ virtual asset funds against illicit activities.
The resolution applies to all investment-related transactions involving virtual assets, excluding those in financial-free zones, and sets certain restrictions. Virtual assets used for payment purposes fall under the jurisdiction of the Central Bank and are not within the scope of the provisions.
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