Dubai-based Digital assets regulator VARA has a set a deadline of April 30 for the receipt of all initial disclosure of questionnaires (IDQs) across the sector from virtual asset operators, with the objective of initiating the migration of the market to a regulated regime.

VARA will be implementing the regulatory requirements for Virtual Asset Service Providers (VASPs) alongside the emirate's Department of Economy and Tourism (DET) and Free Zone Authorities (FZAs). All companies operating in or seeking to operate in the virtual assets sector in or from the Emirate of Dubai must be licensed by VARA.

"We are making progress with Dubai’s D33 Agenda which outlines our mission to establish the Emirate as the capital of the Future Economy anchored by Metaverse, AI, Web3.0 and Blockchain. The virtual assets sector that spans all these pillars is integral to the strategy presenting a dynamically evolving ecosystem that fuels all aspects of sustainable economic growth," Helal Saeed Almarri, Director General Dubai’s Department of Economy & Tourism, said.

"Ensuring that our marketplace is secure, participants are responsible, and investors and consumers are effectively protected is our top priority.  With key stakeholders responsible for commercial licensing across the Emirate working closely to deploy VARA’s full market regulatory construct, we aim to set a benchmark that positions the Emirate of Dubai as a global role model for VA sector development,” he added.

According to the VARA, legacy market operators carrying out VA activities in Dubai (excluding the DIFC) are required to declare their desire to undertake regulated activities by submitting an IDQ to their current licensing authority authority—the DET or any of FZAs—by the final deadline of April 30, 2023.

Upon subsequent receipt of an Application Acknowledgement Notice (AAN), operating VASPs will commence the appropriate course of action for those requiring to be regulated or registered under VARA by 31 August 2023.

A total of seven distinct types of regulated VA activity licences can be applied for:  Advisory Services, Broker-Dealer Services, Custody Services, Exchange Services, Lending and Borrowing Services, Transfer and Settlement Services and Management and Investment Services, VARA said in a statement.

(Writing by Seban Scaria seban.scaria@lseg.com ; editing by Daniel Luiz)