The United Arab Emirates (UAE) is getting closer to issuing a regulatory and supervisory framework that will govern the country’s virtual asset industry, the Securities and Commodities Authority (SCA) has said.
FATF Recommendations
A UAE securities regulator, the SCA has said it is getting closer to “issuing the regulatory and supervisory framework related to virtual assets issued for investment purposes.”
In addition, the regulator revealed in a statement that it had consulted the “concerned authorities” during the development of the regulatory framework that addresses the risks of money laundering and terrorist financing that relate “to virtual assets and virtual asset service providers.” Such consultations have been concluded the statement adds.
The regulator meanwhile said the development of this framework had been done in order to ensure the country’s crypto industry adheres to the Financial Action Task Force (FATF)’s recommendations. As a result, licensed exchanges “can apply for a license for virtual assets exchange subject to the approval and complying to all regulations and procedures of the Authority.”
However, applicants who are not residents of the Abu Dhabi Global Market or Dubai International Financial Centre (DIFC) will be exempted from this rule.
Respecting Anti-Money Loss Controls
In the meantime, it is clarified that those who want to operate a VASP business need to obtain initial approval by the SCA. Furthermore, the SCA said VASPs that have commercial licenses and are providing any virtual asset services, need “to apply to the Authority to obtain the necessary license to practice such activity.”
These persons are also required to “confirm” their obligation to comply with all legislation related to anti-money laundering controls, added the statement.
SCA stated that while they are open to cooperation with all entities, the SCA warned that any breach of the regulatory and supervision frameworks will lead the authority to take the necessary legal and supervisory steps.
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