On 11 March 2022, HH, Sheikh Mohammed bin Rashid Al Maktoum issued Law No. 4 of 2022 the Regulation of Virtual Assets in the Emirate of Dubai (Virtual Assets Law) designed to build a robust framework for protecting investors and setting international standards for virtual asset governance that will encourage positive development.
What you need to know:
Virtual Assets are defined as a digital representation of value that can be digitally traded, transferred or used as an exchange or payment tool or for investment purposes, including Virtual Tokens, any digital representation of any other value determined by the authority in this respect.
Virtual Tokens are defined as a representation of a set of rights that can be digitally issued and traded through a virtual asset platform.
Applicability: The Virtual Assets Law applies only to virtual assets conducted within the Emirate of Dubai (including free zones and special development zones, but excluding the Dubai International Financial Centre). However, the Virtual Assets Law does not regulate services related to virtual assets on a federal level.
Authority: A public entity known as the Dubai Virtual Assets Regulatory Authority (Authority) will be established to oversee and authorize all virtual assets activities in the Dubai.
Presence: individuals must have presence in Dubai to operate virtual assets activities in the Emirate which includes licensing from the relevant commercial authority in Dubai. This licensing process is in addition to the Authority’s approval.
Activities: according to Article 16 of the Virtual Assets Law, the list of permitted activities are, as amended from time to time:
1- virtual asset platform operation and management services
2- exchange between virtual assets and currencies whether domestic or foreign
3- exchange between one or more forms of virtual assets
4- transfer of virtual assets
5- custody and management of virtual assets or control over them
6- virtual asset portfolio services
7- virtual token offering and trading services
Penalties: Breach of any of the Virtual Assets Law provisions may lead to monetary fines as well as suspension or withdrawal of authorisation.
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