Dubai's crypto regulator gives digital asset companies until June 19 to comply with updated activity-based Rulebooks

Dubai's Virtual Assets Regulatory Authority (VARA) has released Version 2.0 of the Rulebooks. The regulator has strengthened controls around margin trading and token distribution services, harmonized compliance requirements across all licensed activities and given clearer definitions for collateral wallet arrangements.

Dubai's cryptocurrency regulator, the Virtual Assets Regulatory Authority (VARA), has given licensed digital asset companies until June 19 to comply with its updated activity-based Rulebooks. The move is part of efforts to further enhance market integrity and risk oversight.

On May 19, VARA announced that it had released Version 2.0 of the Rulebooks, setting out the updated requirements for the 10 core virtual asset service provider (VASP) categories operating within the VARA regulatory framework. The regulator said it had brought in stricter controls around margin trading and token distribution services, while also harmonising compliance requirements across all the regulated activities and giving clearer definitions for collateral wallet arrangements.

The regulator’s team will now engage with the 18 licensed entities to facilitate a smooth transition. The companies are expected to comply with the updated rules after a 30-day transition period.

"In line with global regulatory best practices, a 30-day transition period has been granted to all impacted virtual asset service providers, with full compliance required by 19 June 2025," VARA wrote.

The updated rules will bring consistency across all activity-based rules defining core operational terms. Some of the terms more consistently defined in the update include "client assets," "qualified custodians," and "collateral requirements." The update will also align risk management and disclosure obligations, where activities overlap, in areas like brokerage, custody and exchange.

"The aim was to reduce ambiguity and help VASPs navigate cross-functional compliance more easily," VARA said.

The regulator added that it has also brought in new supervisory and enforcement powers to support the integration of the updated activity-based rules.

"The updated supervision and enforcement provisions in the 2024 Rulebook reflect the Authority’s commitment to fostering a responsible and sustainable ecosystem for virtual assets in the UAE."

The updates come as part of a broader effort by the UAE to become a global hub for cryptocurrency and blockchain technology. The country has been rolling out a number of initiatives to promote the use of crypto and blockchain, and the updates to VARA's rules are part of this effort.

The changes will help to ensure that the UAE's crypto market is well-regulated and protected from abuse. They will also serve to attract more foreign investment into the country's digital asset sector.