LEGAL PERSPECTIVE: Regulation of Virtual Assets in Dubai by Dr AbdelGadir Warsama, Legal Counsel

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Dr AbdelGadir Warsama, Legal Counsel

Dubai passed the Law No (4) of 2022, to regulate “Virtual Assets”. The law established “Dubai Virtual Assets Regulatory Authority”, as legal entity of financial, administrative independence and legal capacity to perform its objectives.

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Objectives of the Authority include, inter alia, promoting Dubai position as regional and global destination in Virtual Assets, enhancing Dubai competitiveness at domestic and international levels to develop digital economy, raising investment awareness on Virtual Assets and encouraging innovations, attracting investors and companies operating in Virtual Assets to work in Dubai, providing rules to protect investors and dealers in Virtual Assets, reducing illegal practices in coordination with relevant entities, setting rules to control supervision of Virtual Asset Platforms, Virtual Asset Service Providers and others related to Virtual Assets.

Moreover, the mandate of the Authority provides that it is the competent body to regulate, supervise and control Virtual Asset services. The powers of the Authority include, preparation of policy and strategic plans related to regulation of Virtual Assets transactions and trades carried out, supervision of issuing and offering Virtual Assets, Virtual Tokens and the disclosures made for the regulation of Virtual Assets Providers according to rules, procedures and their supervision to ensure compliance with laws, issuance of rules governing activities related to Virtual Asset services, Virtual Asset to Virtual Asset clearing and settlement procedures and Virtual Asset custody services, classifying types of Virtual Assets and Virtual Tokens and the rules of trading in Virtual Assets, issuance of procedures to protect personal data of “Beneficiaries” according to Dubai Digital Authority, regulation of the management of Virtual Asset Platforms, Distributed Ledger Technology and Virtual Asset Portfolios, overseeing transactions carried out through them, preventing manipulation of trading prices of Virtual Assets, establishing controls to ensure protection of Beneficiaries and reducing suspicious practices, issuing instructions and guidance in coordination with the relevant entities to establish mechanisms for evaluating and monitoring the Virtual Asset Service Providers, and procedures and measures to be taken regarding suspicious transactions carried out in contravention of legislations.

Moreover, raising awareness among Beneficiaries about Virtual Assets dealings and associated risks, cooperating with the local, federal and international entities and private sector about relevant matters for regulation of Virtual Assets. Also, collecting fees for the activities, charges and commissions relating to dealing and trading of Virtual Assets in the Virtual Asset Platform, in accordance with the legislation in force, considering any complaints related to the Virtual Asset services, and take appropriate decisions, any other functions or authorities that are relevant to the regulation, control and supervision of Virtual Assets and Virtual Asset Service Providers, or are necessary to achieve the objectives of the Authority.

For more protection, to coordinate with the Central Bank of the UAE in all matters related to the protection and stability of the financial system, proposing legislations to regulate Virtual Asset services.

The law gives the newly established Authority all necessary powers to regulate and likewise to supervise all Virtual Assets activities. By this new law, we can say Dubai took the matter of Virtual Assets in hands and put it in the right track to cruse.

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