In March 10, the Ruler, Vice President, and Prime Minister of Dubai, Sheikh Mohammed bin Rashid Al Maktoum declared the New Crypto Law.
By this law, Dubai will establish rules and regulations for crypto businesses and promote responsible growth.
Other than creating the Dubai Virtual Asset Regulation Law, Dubai is also establishing the Dubai Virtual Asset Regulatory Authority “VARA”, which will be overseeing the upholding of the law.
Applicable throughout Dubai, except for the Dubai International Financial Centre (DIFC), the law will create a legal framework for crypto operations and transactions.
Dubai is planning on providing the most advanced crypto ecosystem by designing international standards for virtual assets.
In line with the announcement, Sheikh Mohammed bin Rashid Al Maktoum explained that, “Approving the virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority is a vital step that establishes the UAE’s position in this sector a step that aims to help the sector to grow and protect investors.”
The new regulatory body will be linked to the Dubai World Trade Centre Authority (DWTCA) and will be a part of the expansion strategy of the Dubai Securities and Exchange Higher Committee.
The new crypto law indicates that an enterprise must have a presence in Dubai to conduct business related to virtual assets, and be authorized by the VARA.
Although the law did not specify what asset class virtual assets would fall in, it did explain that failure in adhering to the policies could lead to businesses facing fines or even losing their operating permit.
Setting these regulations was crucial for Dubai due to the uncertainty of the authenticity of crypto products and services. Dubai had already announced penalties for crypto scammers, which came into effect this January. As per those laws, any misleading or inaccurate promotion of cryptocurrencies could cost AED 1 Million ($272k) fine or 5 years of imprisonment.
However, Dubai is an income tax-free and capital gains tax-free country, which means that crypto profits are not subjected to taxation either, which continues with the new crypto law.
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