The United Arab Emirates is setting an example of crypto-regulation, in stark contrast to the American and European models. Each emirate is free to experiment, and does so unashamedly. There are two peculiar closed free zones in the #UAE , where the #crypto industry is developing, constrained by literally minimal rules. GMT Legal lawyers helped Bits.media understand the nuances of the rules and regulations. The country has virtually no regulation at the national level. There are some single acts of state bodies. These are the Central Bank of the UAE resolution of September 30, 2020 on retail payment services and card schemes, as well as the Securities and Commodities Authority resolution No. 23 of October 31 of the same year on "Regulation of Crypto Assets." Cryptocurrencies are regulated in more detail in individual emirates, where local authorities issue special regulations.
Dubai
The most popular emirate for foreigners has a legal definition of a virtual asset: "a digital representation of value that can be digitally traded, transferred or used as a medium of exchange or payment, or for investment purposes. A special supervisory body, the Dubai Virtual Assets Regulatory Authority, has also been established. In February 2023, Dubai entered into force a regulation on virtual assets and related activities, which finally regulated the licensing process of #VASP (Virtual Asset Service Provider), clarified aspects of AML/CFT and marketing. Sanctions for violations of this legislation were established.
Key regulations and legislation: the Virtual Assets Regulation Act of 2022 and the Virtual Assets and Related Activities Regulation of 2023.
Dubai International Financial Centre (#DIFC ) The DIFC has introduced a licensing regime, with Dubai Financial Service Authority (DFSA) as an independent regulator. According to the rules established since 2021, persons performing actions with investment #tokens (e.g. issue, offer, possession, promotion, consulting, intermediation) must obtain a cryptocurrency license from the DFSA and comply with certain obligations. Such a regime has been called the "crypto-token regime." A crypto-token is a cryptographically secured digital rights grant that is issued, transferred and stored using DLT or other similar technology, which grants the holder rights corresponding to those of a security or derivative holder. It also has a purpose and effect consistent with the security or derivative. The provisions on investment tokens speak to all of this. Under the new regime, financial services and activities can only be performed on "recognized crypto-tokens. In this regard, an initial list has been published indicating that the DFSA initially recognized Bitcoin, Etherium and Litecoin. This publicly available list is expected to continue to expand - as applicants apply to the DFSA to do business with other tokens. The DFSA has issued guidance on cryptocurrency regulation, which includes licensing requirements for crypto exchanges and custodians, as well as anti-money laundering (AML) and counterterrorist financing (CTF) regulations. The DFSA requires that cryptoassets be kept in cold storage, a security measure designed to protect against hacking and theft. All types of non-exchangeable tokens (NFTs) are exempt from financial regulation under the crypto-token regime. However, AML/CTF regulations apply to them. In addition, the DFSA does not regulate confidential tokens, algorithmic tokens, or central bank digital currencies.
The main regulatory and legal acts: the regulation "On investment tokens" 2021.
