The UAE’s federal regulator invites crypto firms to apply for licenses under its new regulatory framework for the sector.
The Securities and Commodities Authority (SCA), the federal regulator of the United Arab Emirates (UAE), announced on Monday that it will start accepting license applications from crypto firms that want to operate in the country.
The move follows a decision by the UAE Council of Ministers last year to bring the crypto sector under the SCA’s supervision. The new licensing regime applies to all virtual asset service providers (VASPs) in the UAE, except for those that already have licenses from the financial free zones in some of the seven emirates, such as Dubai and Abu Dhabi.
These firms will still need to get approval from the SCA to offer their services in the rest of the country. The SCA said that it has updated its virtual asset rule book for 2022, adding new financial activities such as brokerage and custody of virtual assets, as well as a new category of VASP.
The regulator also said that it expects crypto firms to meet high standards of operational efficiency, flexibility, and compliance.
One of the requirements for obtaining a license is that the crypto firm must have a physical presence in the UAE and a legal form approved by the local authorities.
Financial activities like brokerage and custody of virtual assets, as well as a new category of virtual asset service provider, have been added to the legislation.
“A person wishing to engage in virtual asset activities shall have headquarters in the State to conduct his business, according to one of the legal forms approved by the local authorities concerned with commercial licenses,”
Exerpt from The Virtual Asset Rule Book, SCA.
The SCA also warned that it will take strict measures against any unlicensed or unauthorized VASPs operating in the country.
The UAE is one of the most progressive countries in the Middle East when it comes to crypto regulation. Dubai, in particular, has been attracting many crypto firms with its friendly and supportive environment.
For example, Bybit, one of the largest crypto exchanges in the world, recently opened its global headquarters in Dubai after receiving in-principle approval from the Dubai Financial Services Authority (DFSA) last year.
The DFSA is also reviewing applications from other major crypto players such as Binance and Coinbase.
