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0 CommentsAlthough Dubai’s Virtual Assets Regulatory Authority (VARA) has deployed comprehensive requirements for the crypto space, professionals working in licensing believe that the lengthy process is worth it.
Cointelegraph contacted crypto licensing executives working in Dubai to get their thoughts on the local licensing process and laws.
Tao Xiao, managing partner of business consulting firm NH Management, told Cointelegraph that VARA’s crypto licensing process can take up to a year. Xiao, who previously worked at Dubai’s Chamber of Commerce, said the process demands meticulous attention to detail and strong compliance measures. Xiao said:
“It’s an intricate and lengthy process. The process of obtaining the necessary licenses demands diligence and patience, as each aspect of the business undergoes scrutiny to ensure compliance with Anti-Money Laundering and Know Your Customer regulations.”
Xiao said Dubai’s “stringent” regulatory framework reflects its commitment to maintaining market integrity and safeguarding investor interest. “Through strict adherence to AML and KYC standards, VARA ensures robust protocols to mitigate risks and prevent illicit activities in the crypto market,” Xiao added.
In 2022, the United Arab Emirates (UAE) was placed into the Financial Action Task Force’s (FATFs) “gray list” of jurisdictions under increased monitoring.
Following its placement on the list, the UAE introduced more comprehensive guidelines and laws to combat money laundering.
As a result, the jurisdiction was removed from the FATF’s gray list in February 2024. This means the country is not subject to additional scrutiny from the Paris-based financial watchdog, FATF.
While compliance may be difficult, Xiao believes that there are many benefits to getting licensed in Dubai. The executive also highlighted that the requirements are “not impossible” to complete. Xiao added:
“As of now, many projects are on the waiting list for VARA licensing, indicating that meeting the requirements doesn’t guarantee approval […] However, it’s essential to recognize that VARA’s objective is not to hinder progress but to ensure the safety and security of investors and the broader market.”
Xiao highlighted that there are many benefits for companies situated in Dubai. This includes access to global markets, favorable tax policies and a safe environment for financial technology innovation.
Sam Blatteis, the CEO and co-founder of government affairs firm The MENA Catalysts, echoed the sentiment and explained why it’s worth it for companies to set up shop in Dubai. Blatteis told Cointelegraph:
“The government is gradually doing for crypto what Silicon Valley did for tech. The country is quickly becoming the Coachella of the crypto world.”
Blatteis explained that though the UAE may be small on paper, the location has huge potential. “As a high-income economy, ubiquitous financial services, large expat population, crypto adoption use cases expanding exponentially, not incrementally,” he added.
Blatteis also advised firms looking to expand into the UAE. The executive highlighted that they must implement a “strategic recalibration.” This includes looking into others who have gone through the process before.
The executive added that choosing people who’ve not only worked on the legal issues but have “cut the metaphorical ribbon” with officials and have gotten results may be the companies’ best bet.
In a recent interview with Cointelegraph at Token2049, Chainlink co-founder Sergey Nazarov said he was “very impressed” with Dubai and the UAE. Nazarov explained:
“I think the regulation is increasingly progressive, and there’s a large collection of teams from all parts of the world, the West, the East, and kind of converging on Dubai as a place where they can do transactions, start firms, and build teams.”
Nazarov said that the government, regulators, legal system and economics of Dubai are “very attractive to our industry.”
Source: https://cointelegraph.com/news/dubai-crypto-licensing-regime-professionals
