Dubai's Crypto Regulator Gives VASPs Until June 19 to Comply with Updated Rulebooks

Dubai's crypto regulator has given licensed digital asset companies until June 19 to comply with its updated activity-based Rulebooks

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

In a statement on May 19, VARA announced the Version 2.0 release of the Rulebooks, which came into effect on May 18. The regulator unveiled plans to strengthen controls around margin trading and token distribution services.

It also announced that it would be harmonizing compliance requirements across all licensed activities and giving clearer definitions for collateral wallet arrangements, among other updates.

Its team will now be engaging with the 17 licensed entities to adjust to the changes. The companies can expect 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 (VASPs), with full compliance required by 19 June 2025.”

What has VARA updated?

The crypto regulator highlighted that it had been busy enhancing supervisory mechanisms across several regulated activities. This includes advisory, broker-dealer, custody, exchange, lending and borrowing, virtual asset (VA) management and investment, and VA transfer and settlement services.

A VARA spokesperson told Cointelegraph that the updates will bring consistency across all activity-based rules, defining core operational terms. The spokesperson gave examples of terms like "client assets," "qualified custodians," and "collateral requirements" as some of the terms more consistently defined in the update.

The update also aligned 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.”

As for margin trading, the VARA spokesperson said they tightened leverage thresholds, mandated clearer collateralisation standards, and enhanced the monitoring obligations for VASPs offering this feature.

Margin trading allows traders to control large positions with smaller amounts of capital. It amplifies both gains and losses. Tightening the leverage traders use helps limit the risks of widespread liquidations in a market downturn.

The crypto regulator also introduced a new Section 9 on token distribution that covers licensing prerequisites, investor protections and marketing restrictions. The spokesperson highlighted the marketing restrictions, especially for "retail-facing offers."

“It’s about aligning with global conduct expectations and closing observed regulatory gaps.”