The Dubai Virtual Asset Regulatory Authority (VARA) has outlawed the issuance and trading of anonymous cryptocurrencies such as Monero, Dash and Zcash. The new set of rules from the emirate's regulator provides for fines of up to AED 20 million (~$5.4 million) for individuals and up to AED 50 million (~$13.6 million) for digital asset businesses such as cryptocurrency exchanges.
The Dubai Virtual Assets Regulatory Authority (VARA), the emirate's regulator, has issued a set of rules relating to virtual assets and related activities, which include a ban on anonymous cryptocurrency issuance and transactions. These measures are caused by an increase in fraud and financial manipulation using these types of tokens, which criminals use to hide stolen funds.
The Dubai Financial Services Authority as part of its rules has banned cryptocurrencies that " increase anonymity", such as Monero, Dash and Zcash. The document states that these are digital assets that "do not allow tracking of transactions or ownership records using public blockchain, and for which the VASP (cryptoservice provider) does not have methods or mechanisms to trace them or identify owners". Organisations investing more than $250 million in digital assets must register with VARA, which can revoke the licence in case of insolvency or violations, setting a fee of AED 40,000 to AED 200,000 (~$10,890-$54,450). Security standards are also set out in the document, along with requirements for how cryptocurrencies are generated, stored and exchanged.
Since the introduction of mandatory accreditation for cryptocurrencies in Dubai, the regulator has already received hundreds of applications for licences. According to Bloomberg, in the coming months, VARA will increase its staff four times to cope with the influx. These rules apply not only in Dubai but also in its special development zones and free zones, except for DIFC (Dubai International Financial Centre), which is governed by a separate authority.
In 2022, a record number of cryptocurrency firms were created in the DMCC (Free Trade Zone in Dubai) — 3,049, while their total number exceeded 22,000. Last August, VARA issued rules for advertising cryptocurrencies that prohibit misinforming shareholders about the profitability of projects.
