Dubai’s Virtual Assets Regulatory Authority (VARA) has taken a decisive step towards strengthening market integrity with the publication of Version 2.0 of its activity-based rulebooks. The updated rulebooks introduce supervisory mechanisms across regulated virtual asset activities. These range from advisory and broker-dealer services to custody arrangements and exchange operations. VARA announced that the key updates include strengthened controls around margin trading and token distribution services and also, harmonised compliance requirements across all licensed activities.
Significant Changes to Virtual Asset Issuances
The most notable developments concern virtual asset issuances, where VARA has fundamentally restructured its approach. The authority has streamlined Category 2 Virtual asset (VA) issuances by removing the prior approval requirement. This, however, comes with the caveat that all placement and distribution activities must now be conducted through licensed distributors.
The introduction of exempt VAs represents another significant change. These include non-transferable virtual assets and redeemable closed-loop virtual assets. The new categories acknowledge the diverse nature of digital assets and provide appropriate regulatory treatment for different risk profiles. Additionally, the concept of asset-referenced virtual assets has been formally incorporated into the regulatory framework, complete with dedicated issuance rules that classify them as Category 1 VA issuances requiring full regulatory compliance.
Strategic Implications for the Market
Virtual asset service providers have been granted a 30-day transition period to implement these changes, with full compliance required by 19th June 2025. VARA has indicated that its Supervision Teams will directly engage with each licensed entity to provide specific guidance as needed. Vara’s enhanced framework provides operational clarity for stakeholders.
About LawBEAM
LawBEAM’s leading crypto team has extensive experience helping firms navigate complex legal and regulatory change. We represent UK and international crypto firms and advise on legal and regulatory strategy that positions our clients for success in international markets. Please contact our team to discuss how we can support your legal and regulatory needs. We note that global regulatory regimes for cryptoasset activities are developing quickly and will continue to monitor the development of cryptoasset regimes around the world.
