By James Davis
The Virtual Assets Regulatory Authority (VARA) of Dubai, a technological innovation hotspot, recently announced a ban on privacy tokens. The decision has sparked discussions and debates in the cryptocurrency community, with many questioning the reasoning behind the ban and its potential impact on the region’s crypto industry.
According to the Dubai Financial Services Authority (DFSA), privacy tokens like Monero, Zcash, and Dash are being utilised for criminal operations and endangering the financial system’s integrity. Additionally, these tokens give a high level of anonymity, making it impossible to follow unlawful transactions and identify people involved.
All Asset-Based Firms to Get a License
It is important to note that the VARA requires any company calling itself a virtual asset firm first to get a license, according to familiar sources. Large proprietary traders regularly investing $250 million or more in cryptocurrencies must register with the VARA. Services fees can range from 40,000 dirhams (about $10,889) to 200,000 dirhams (roughly $54,449), and license revocation can occur for any breach of directives or insolvency.
Exchanges and payment processors might allegedly face fines of 50 million dirhams ($13.6 million) for breaking market conduct regulations, while individuals could face fines of 20 million dirhams ($5.4 million). The VARA is in charge of all special development and free zones in Dubai (excluding the Dubai International Financial Centre, governed by an independent body).
500+ Crypto Firms Joined Dubai`s Crypto Community
Recent data indicates that over 500 crypto firms have joined Dubai’s digital asset ecosystem. The prosperous Middle Eastern metropolis has not yet simplified the lives of businesspeople. Frequently, more than a hundred documents or pieces of information are necessary during due diligence.
According to revelations, the VARA’s goal is to make Dubai the regional and global centre for virtual assets by creating a regulatory framework conducive to business. As a result, the coalition believes that more capital will flow into Dubai, and more companies will choose to locate there.