Dubai’s Virtual Assets Regulatory Authority (VARA) has significantly stepped up its regulatory efforts, penalizing 19 digital asset firms for operating without the necessary licenses. This robust action targeted firms that violated marketing regulations, including the use of unapproved promotional materials and misleading disclaimers. Fines imposed ranged from AED 100,000 (approximately 24 lakh Indian Rupees) to AED 600,000 (around 1.43 crore Indian Rupees), reflecting the severity of each violation. Dubai’s primary objective in these intensified efforts is to protect investors and mitigate the risks associated with unlicensed crypto activities, thereby fostering a fully regulated and secure virtual asset environment.
VARA Enforces Stricter Compliance and Takes Decisive Action
Following a series of investigations into unauthorized operations, VARA promptly issued cease-and-desist orders to all penalized entities. Regulators firmly reiterated that obtaining prior approval is a prerequisite for offering or promoting any crypto services within the UAE. These actions are integral to VARA’s continuous enforcement program, which aims to weed out unlicensed operators and reduce potential legal and reputational risks within Dubai’s rapidly expanding digital asset market.
In 2024, the regulatory body implemented more stringent marketing rules for virtual asset service providers. These updated regulations mandate clear disclaimers and require prior approval for all promotional content to effectively combat deceptive outreach. Firms found to be in breach of these guidelines faced immediate financial penalties and enforcement actions. This echoes a similar crackdown in October 2024, where seven companies were also fined for comparable infractions, clearly establishing a precedent for the regulator’s firm and consistent approach.
This latest enforcement push is part of broader regulatory enhancements introduced by VARA earlier this year to intensify risk oversight and fortify investor protection. Announced in May, the updated framework encompasses licensed crypto and Web3 activities, including services such as margin trading, token distribution, advisory, custody, and exchange operations. Service providers are now required to conduct quarterly client risk assessments, diligently verify comprehensive client information, and adhere strictly to clarified operational guidelines. Ruben Bombardi, VARA’s General Counsel, highlighted that these updates “reinforce the foundations of a responsible, scalable ecosystem.”
Dubai’s regulators have unequivocally stated that only licensed entities are permitted to operate or promote crypto services within the emirate. The authority has also collaborated with the Securities and Commodities Authority to harmonize regulatory approaches across the entire UAE. These comprehensive measures are designed to strike a crucial balance between fostering innovation and ensuring robust security, ultimately strengthening trust and transparency within Dubai’s virtual asset ecosystem.