What is VARA (Virtual Assets Regulatory Authority) of Dubai?

VARA is the regulatory authority tasked with overseeing Dubai’s virtual asset industry. Its mission is to ensure that businesses operating in this sector comply with local regulations, uphold the highest standards of security and transparency, and foster the development of a thriving virtual asset market in Dubai. VARA provides businesses operating in the virtual asset industry with a variety of licenses, including trading, custody, and initial coin offering (ICO) licenses.

Obtaining a VARA licence is essential for any company seeking to operate in Dubai’s virtual asset industry. Not only does it increase your business’s credibility and legitimacy, but it also ensures that you comply with all applicable regulations and requirements.


The Dubai Virtual Asset Regulatory Authority (VARA) issued the Virtual Assets and Related Activities Regulations 2023 (VARA Regulations) on 7 February 2023. These regulations outline VARA’s comprehensive Virtual Asset Regime for Dubai, United Arab Emirates. (UAE). The VARA Regulations are a follow-up to Cabinet Decision No (111) of 2022 on the Regulation of Virtual Assets and their Service Providers, which states that it is illegal for anyone to engage in virtual asset activities in the UAE (excluding the ADGM and DIFC) without first obtaining approval and a licence from the UAE Securities and Commodities Authority (SCA) or a local licensing authority (Such as VARA).

The VARA Regulations were published in accordance with Law No. (4) of 2022 Regulating Virtual Assets in the Emirate of Dubai, which earlier designated VARA as Dubai’s virtual asset regulator.

1. Law No. (4) of 2022 Regulating Virtual Assets in Dubai

This law applies to all zones in the Emirate, including Special Development Zones and self-governing zones, but not the Dubai International Financial Centre. This law establishes a public corporation known as the Dubai Virtual Assets Regulatory Authority. VARA will have legal personality, financial and administrative independence, and the legal capacity to carry out all acts and dispositions necessary to accomplish its goals. VARA will have an affiliation with the Dubai World Trade Centre (DWTC) Authority.

As the entity responsible for regulating, supervising, and monitoring Virtual Asset services in the Emirate, VARA will have the responsibilities and authority; to regulate, superintend, and monitor the issuance, offering, and relevant disclosure of Virtual Assets and Virtual Tokens as well as classify and determine the types of Virtual Assets and Virtual Tokens while prescribing the trading standards and norms for the same.

2. The Virtual Assets and Related Activities Regulations 2023 (VARA Regulations)

The Virtual Assets and Related Activities Regulations 2023, establish a comprehensive Virtual Asset (VA) Framework based on economic viability and transnational financial security.

VARA is the first custom Virtual Asset regime in the world, and as such, its Full Market Product (FMP) Regulations are designed to explicitly accommodate the provision of permissible activities and services to customers and investors in Dubai.

VARA aims to develop a model framework for global economic sustainability within an innovation-centric environment that is genuinely borderless, technology agnostic, and future-oriented. This will be accomplished with the help of rules and guidelines designed to provide clarity, guarantee certainty, and mitigate market risks.

VASPs who meet VARA’s licensing requirements must adhere to four Compulsory Rulebooks:

  1. Company Rulebook,
  2. Compliance & Risk Management Rulebook,
  3. Technology & Information Rulebook, and
  4. Market Conduct Rulebook.

Activity-specific Rulebooks include:

  1. Advisory Services Rulebook,
  2. Broker-Dealer Services Rulebook,
  3. Custody Services Rulebook,
  4. Exchange Services Rulebook,
  5. Lending and Borrowing Services Rulebook,
  6. Payments and Remittances Rulebook (Pending), and
  7. Management and Investment Services Rulebook.


Under Article 6 of the decision, the SCA may request any documents or data from the operator of the virtual asset platform, which must be provided within the specified time frame. In addition, the article stipulates that the SCA shall perform supervisory, investigative, supervision, and inspection duties in relation to the virtual asset platform, its operator, and all other relevant aspects. In accordance with Article 7, complaints may be submitted against decisions issued by the SCA to implement the terms of this decision in accordance with the controls established for this purpose.

Definition of Regulated Virtual Assets Activities

VA Activity


“Advisory Services”

Refers to offering, providing, or agreeing to provide a personal recommendation to a client, either upon its request, or on the initiative of the Entity providing the recommendation, in respect of one or more actions or transactions relating to any Virtual Assets.

When providing a personal recommendation, the Entity providing the recommendation shall consider the following factors at a minimum in respect of each client.

  1. knowledgeand experience in investing in Virtual Assets,
  2. investment objectives including, but not limited to, risktolerance, time horizon and venues through which they can acquire Virtual Assets; and

financial circumstances including, but not limited to, their ability to bear sudden and significant losses or proportion of their net worth invested in Virtual Assets.

“Broker-Dealer Services”

Refers to any of the following;

  1. arranging orders for the purchase and sale of Virtual Assetsbetween two Entities,
  2. soliciting or accepting orders for Virtual Assets andaccepting fiat currency, or other Virtual Assets, for such orders,
  3. facilitating the matching of transactions in Virtual Assetsbetween buyers and sellers,
  4. entering into Virtual Asset transactions as a dealer onbehalf of the Entity for its own account,
  5. makinga market in Virtual Assets using client assets, or
  6. providing placement, distribution or other issuance relatedservices to clients issuing Virtual 

Note: As per Regulation II, any Entity in the Emirate that issues a Virtual Asset during a business, must comply with the VA Issuance Rulebook, as may be amended from time to time.

“Custody Services”

Refers to safekeeping Virtual Assets for or on behalf of another Entity and acting only on verified instructions from or on behalf of such Entity.

Note: All VASPs shall be subject to Rules regarding the storage and custody of clients’ Virtual Assets. Only VASPs which segregate each client’s assets in separate VA Wallets will qualify for a Custody Services Licence.

“Exchange Services”

Refers to any of the following,

  1. conducting an exchange, trade or conversion betweenVirtual Assets and fiat currency,
  2. conducting an exchange, trade, or conversion between oneor more Virtual Assets,
  3. matching orders between buyers and sellers and conductingan exchange, trade, or conversion between (i) Virtual Assets and fiat currency or (ii) one or more Virtual Assets; or
  4. maintainingan order book in furtherance of (a), (b) or (c) above.

“Lending and Borrowing Services”

Refers to carrying out a contract under which a Virtual Asset shall be transferred or lent from one or more parties (the Lender(s)) to one or more other parties (the Borrower(s)) where the Borrower(s) shall commit to return the same, at the request of the Lender(s), at any time either during or at the end of the period agreed upon.

“Payments and Remittances Services”

Refers receiving Virtual Assets, for the transmission or transfer of  such Virtual Assets from one Entity to another Entity or from one Entity to another VA Wallet, address, or location.

“VA Management and Investment Services”

Refers acting on behalf of an Entity as an agent, or fiduciary, or otherwise taking responsibility for the management, administration, or disposition of that Entity’s Virtual Assets.

Examples may include, but shall not be limited to;

  1. investment management services or otherwise managingVirtual Assets; and
  2. takingresponsibility for the staking of Virtual Assets for the purposes of earning fees or other amounts paid to validators and/or node operators of a proof-of-stake Distributed Ledger 

A. Applying for Multiple Virtual Assets Activities

A VASP may apply for multiple activities and aggregate them under a single overarching licence in the absence of a specific need for segregation of an activity and/or an explicit requirement to demonstrate governance independence or arm’s length association from another. VASPs licensed to engage in multiple activities must satisfy the requirements for each activity in their entirety and always maintain compliance.

VA Custody Services is the only activity on the current list of seven activities that must be held wholly separate from most of the other VA Financial Services license categories. A VA Custodian must therefore be established as a separate legal entity with a separate license and may only offer staking as an incremental service under specified conditions.

Any VASP or traditional economy entity looking forward to offering any of the above VA regulated activities in or from the Emirate of Dubai must apply for and receive a license from VARA before commencing operations, whether offered to residents of the Emirate or global customers where the activity is permitted.

B. Other Activities

No VA activity is ‘exempt’ from regulatory supervision, and hence any VA service or activity including but not limited to that which is offered by DLT (Distributed Ledger Technology) service providers may require a VARA licence or registration. Such DLT service providers will have to determine if they are carrying out any Virtual Asset activity that falls within the scope of the VA categories described above.

C. Proprietary Trading

VA Proprietary Trading confirmed to be below certain trading volumes will require a VARA NOC to confirm that the activity may be undertaken with regulatory oversight without a VA Licence.

D. Virtual Asset Issuance Activities

Issuers of Virtual Assets must obtain approval from VARA under the “VA Issuance Rulebook” before undertaking such activity.