Dubai's Virtual Assets Regulatory Authority (VARA) Updates Its Crypto Activity-Based Rulebook

The Version 2.0 crypto activity-based Rulebook harmonizes compliance requirements across all licensed activities and gives more precise definitions for collateral wallet arrangements.

Dubai’s Virtual Assets Regulatory Authority (VARA) has given licensed digital asset companies a June 19 deadline to comply with its updated crypto activity-based Rulebook, which aims to enhance market integrity and risk oversight.

Announced on May 19, Version 2.0 of the crypto activity-based Rulebook harmonizes compliance requirements across all licensed activities and gives more precise definitions for collateral wallet arrangements, the latest move in Dubai’s ongoing effort to balance innovation with robust market safeguards.

The move comes as the Gulf state continues to build out its Web3 hub and pushes to attract more crypto firms to set up shop in the region.

The regulator’s supervision teams will engage with each licensed entity to provide activity-specific guidance as needed.

"Our commitment remains to ensure that innovation and compliance go hand in hand. These rulebook updates further reinforce the foundations of a responsible, scalable ecosystem," said Ruben Bombardi, General Counsel and Head of Regulatory Enablement VARA.

The proposed updates foster enhanced market discipline, increased risk transparency, and operational resilience across Dubai's VA ecosystem. In line with existing regulatory practices, all virtual asset service providers have been granted a 30-day transition period and are expected to comply fully by June 19, 2025.

"A 30-day transition period has been granted to all impacted virtual asset service providers [VASPs], with full compliance required by June 19, 2025," the VARA statement said in part.

"This signals the apex regulator's ongoing efforts to balance innovation with robust market safeguards, setting the stage for a future-proof Web3 hub in the region."

The apex regulator is planning to introduce an activity-based regulatory approach that varies according to the nature of the service being provided.

The announced supervision framework aims to enhance supervisory mechanisms covering the entire digital asset spectrum, including:

* Virtual asset (VA) advisory services

* Broker-dealer services

* Custody services

* Exchange services

* Lending and borrowing services

* Virtual asset management and investment services

* Virtual asset transfer and settlement services

Among the improvements in Version 2.0 are proposals to strengthen controls surrounding margin trading and token distribution services, more precise definitions for collateral wallet arrangements, and harmonized compliance requirements across all licensed activities.

This move makes VARA the pioneer of a dedicated virtual assets regulator in the world. The regulator has already licensed over 30 VASPs, including Binance, OKX, Crypto.com, and Gate.io.

Earlier this year, the apex regulator announced plans to introduce an activity-based regulatory approach that varies according to the nature of the service being provided.

The regulator is also planning to introduce an activity-based regulatory approach that varies according to the nature of the service being provided.

The announced supervision framework aims to enhance supervisory mechanisms covering the entire digital asset spectrum, including VA advisory services, broker-dealer services, custody services, exchange services, lending and borrowing services, virtual asset management and investment services, and virtual asset transfer and settlement services.

Among the improvements in Version 2.0 are proposals to strengthen controls surrounding margin trading and token distribution services, more precise definitions for collateral wallet arrangements, and harmonized compliance requirements across all licensed activities.

This move makes VARA the pioneer of a dedicated virtual assets regulator in the world. The regulator has already licensed over 30 VASPs, including Binance, OKX, Crypto.com, and Gate.io.

An earlier crypto token framework that came into force in June 2024 requires all crypto companies to adhere to enhanced requirements for the admission of crypto tokens, updated rules on custody and client asset protection, and strengthened AML measures.

UAE crypto companies are required to strictly comply with KYC, AML, transaction monitoring, cybersecurity, and licensing rules enforced by UAE regulators and aligned with FATF standards