Dubai’s Virtual Assets Regulatory Authority (VARA) has introduced changes to its crypto policies, aiming to tighten risk oversight and ensure investor security. The updated policies will also focus on deploying more control around margin trading and token distribution services. Through these upgrades, the VARA expects to make the crypto ecosystem more scalable. The development comes weeks after the Dubai Land Department (DLD) piloted its “Real Estate Tokenisation Project” that aims to initiate collaborations between global Web3 firms and Dubai’s real estate community.
The development was announced by the regulatory body on May 19. The VARA said in a press release that it has added more clarity to the compliance requirements across all licensed crypto and Web3 activities.
Service providers offering crypto advisories and custody support will have to align their businesses with the upgraded guidelines. Exchanges, broker-dealer services, and lending and borrowing services will also need to adhere to the revamped policies. “These rulebook updates reinforce the foundations of a responsible, scalable ecosystem,” said Ruben Bombardi, VARA’s General Counsel and Head of Regulatory Enablement.
The implementation of client risk assessment every three months is part of the VARA’s rules. Providers of virtual asset services have also been directed to verify the identity of their clients through names, nationalities, addresses, birthplaces, and employer names among other details. “The updates are designed to promote greater market discipline, risk transparency, and operational resilience across Dubai’s virtual asset ecosystem,” the VARA said.
In the coming days, VARA officials will reach out to licensed crypto entities to assist them in adhering to the updated operational guidelines. The agency’s Supervision Team will provide the relevant activity-specific guidance to each entity.
The regulatory body has decided on a 30-days window for crypto businesses to comply with the rules. The deadline for compliance has been set for June 19.
In recent times, the VARA has indicated multiple times that it has observed a rise in crypto-related fraudulent activities, that pose direct financial risks to the investors. In February, the agency urged investors to be cautious with memecoin engagement, calling them “highly speculative” assets.
The VARA previously introduced changes to crypto marketing policies in September 2024. Amid the evolving regulatory landscape, Dubai is consistently taking steps to integrate crypto and blockchain with government services. Last week, for instance, Dubai’s Department of Finance (DOF) teamed up with Crypto.com to allow crypto payments for government services
