The UAE has become one of the world’s most important hubs for virtual assets. To help founders, compliance officers, and investors understand what it takes to operate in this market, our recent webinar, Crypto Licensing in the UAE: Frameworks and Requirements for 2025, provided a detailed walkthrough of the regulatory landscape. Here’s a recap of the key points, presented in concise bullets, with the full recording available for a deeper dive.
Key Regulators to Know
- VARA (Dubai): Oversees Virtual Asset Service Providers outside of DIFC. Categories include exchanges, broker-dealers, custody, wallets, and token issuance.
- DFSA (DIFC): Regulates within the Dubai International Financial Centre. Covers activities such as dealing in investments, custody, and running trading facilities.
- FSRA (ADGM): Supervises Abu Dhabi’s Global Market. Licensing applies to brokers, custodians, fund managers, advisers, and exchanges.
- Federal Level: The SCA and Central Bank regulate firms outside the free zones.
VARA Licensing Highlights
- Activities Covered: Exchange services, fiat-to-VA and VA-to-VA broker services, transfer services, custody, wallet provision, and token issuance.
- Token Issuance: Category 1 requires a license plus approval. Category 2 requires a licensed distributor. Some closed-loop tokens are exempt but remain under VARA oversight.
- Requirements: Incorporation in Dubai, fit-and-proper checks, business plan, compliance frameworks, technology/security standards, capital adequacy, insurance, and record-keeping.
- Fees: Paid-up capital ranges from AED 100,000 to AED 1.5M+ ($27k–$408k). Application fees range from AED 40k to 100k, with annual supervision between AED 80k and 200k.
DFSA Licensing in DIFC
- Activities: Principal and agency trading, deal arranging, asset management, investment advice, custody, clearing, and operating a multilateral trading facility.
- Application Process: Requires incorporation in DIFC, early engagement, fit-and-proper checks, business plan, financial resources, and detailed application forms.
- Timeline: Typically takes 6–12 months.
- Capital Requirements: Vary by license. For example, matched principal trading requires $200k, while exchanges can require up to $4M.
FSRA Licensing in ADGM
- Regulated Activities: Principal trading, agency trading, arranging deals, managing assets, investment advice, custody, operating trading facilities, and clearing houses.
- Application Process: Begins with pre-application engagement, then a full application including compliance systems and financial resources. Approval comes in two phases: in-principle approval and final financial services permission.
- Capital & Fees: Minimum capital depends on activity, often tied to 6–12 months of operating expenses. Application fees can total $70k+, with supervision fees around $75k annually.
Innovation Programs
- VARA: Runs pilot programs with licensed firms.
- DFSA: Offers an Innovation Testing License and Tokenisation Sandbox.
- FSRA: Hosts RegLab and DigitalLab for fintech and digital asset testing.
Why This Matters
- For Founders: Knowing which regulator aligns with your model is crucial to entering the market efficiently.
- For Compliance Leads: Frameworks help shape internal controls and prepare applications.
- For Investors: Licensed businesses signal stronger governance, risk management, and credibility.
Watch the Full Webinar
This recap condenses the discussion, but the full webinar includes detailed explanations of licensing categories, requirements, and case insights.
by
Iryna Kuzyk
Legal Expert
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