Author: Syedur Rahman 14 March 2022
Dubai has introduced its first law relating to virtual assets.
its ruler Sheikh Mohammed Bin Rashid announced the law and said that a regulator was being established to oversee the virtual assets sector. As yet, Dubai has not specified which assets would be covered by the new law, which is called the Dubai Virtual Asset Regulation Law.
United Arab Emirates, of which Dubai is part, has been eager to introduce virtual asset regulation in order to attract new forms of business.
The new law is an attempt to position Dubai and the UAE as a regional and global destination for the virtual assets sector. The new regulator, the Dubai Virtual Assets Regulatory Authority, will oversee the development of the business environment for virtual assets in terms of regulation, licensing and governance.
The new law will apply throughout Dubai, apart from in the state-owned Dubai International Financial Centre (DIFC) zone. The DIFC has its own body, the Dubai Financial Services Authority (DFSA), which is looking to introduce its own comprehensive system of regulation of virtual assets.
Last October, DFSA released the first part of its regulation, which covered digital tokens. It has begun consultations on regulation to cover assets such as cryptocurrencies.
UAE's Securities and Commodities Authority (SCA) has said the UAE is now addressing the issue of virtual assets regulation.
Dubai’s new law has to be viewed as a step in the right direction and an indicator that such assets are being viewed as commodities of genuine value that are here to stay. For now, it remains to be seen exactly how crypto assets will be governed in Dubai. Those who are looking to offer crypto assets may need to be incorporated onshore within the UAE or within one of the UAE’s financial free zones.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.