Opinion: Irina Heaver, crypto lawyer.
The founder of viewing the regulatory structure as the center of its listing strategy is someone who thrives in the UAE. Unfortunately, many founders view licensing as an afterthought.
The UAE is not a place where you can cut it. But in this place, thoughtful, well-prepared founders are rewarded with speed, clarity and a highly supported ecosystem.
Contrary to the beliefs of some founders, regulators are not a problem – confusion, poor planning and lack of preparation.
The crypto-licensed landscape of the United Arab Emirates can be so difficult to grasp that even experienced venture capitalists, serial entrepreneurs, and global law firms often misunderstand the regime.
Let us know the situation.
One country, two legal systems
The UAE is a federal state of seven emirates that operates under two different legal systems.
The mainland legal system, known as the “land” regime, covers the entire UAE Territory, including more than 45 economically uneconomic areas. These jurisdictions belong to the civil law of the UAE and are governed by the UAE court system.
Under the UK common law, the unrelated financial district, the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC) operate independently. They also maintain their own regulatory bodies and court systems, separate from the mainland’s judicial system.
Understanding this fork is crucial because the regulators that manage your crypto activity are primarily dependent on the legal framework of your choice of operations.
One country, five crypto-regulators
Five separate authorities regulate cryptocurrencies and related activities, each with its own jurisdiction, authorization and licensing framework.
In mainland China, these three related Regulatory agencies yes:
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Central Bank of the United Arab Emirates (CBUAE): Regulates activities involving AED-based stable shares, cryptocurrency payments and remittances, and approves foreign stablecoins.
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Securities and Commodity Administration (SCA): Regulates crypto exchanges, broker dealers and token products similar to securities or commodity contracts.
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Dubai Virtual Asset Regulatory Authority (VARA): Regulates most virtual asset service providers (VASPs) operating in Dubai, excluding most asset service providers (VASPs) in DIFC.
Related: Dubai regulator green light Repool’s rlusd stablecoin
In the financial exclusion area, there are two separate regulators:
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Financial Services Regulatory Authority (FSRA): ADGM’s financial regulator, which developed one of the most advanced digital asset regulatory frameworks in 2018.
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Dubai Financial Services Agency (DFSA): DIFC’s regulator adopts a cautious but evolving approach to crypto assets.
This unique framework can be both a blessing and a challenge. Choosing the wrong regulator or failing to understand the scope of each agency can result in a waste of time, missed opportunity, or in some cases a complete permission failure.
Select the correct regulator
The correct jurisdiction depends entirely on your specific business model. Here are some common situations:
Launch crypto exchange
Planning to be the next second-hand one? Prepare to browse strict licensing paths. VARA, SCA or ADGM is your potential residence. Everyone has their own requirements, and no one is suitable for the faint of heart.
Send stable
If you want to compete with Tether in AED, welcome to the adults’ table. You will deal with the central bank of the UAE.
Build a tokenized RWA platform
Want to turn luxury real estate, art or whiskey warehouses into blockchain-based assets? Vara’s newly introduced system of asset-backed tokens It is a must read. No, slapping the “Practical Token” on the white paper won’t cut it out here.
Establish a crypto fund
Let capital deployment and vision support the next crypto unicorn? It’s time to be your best friend with ADGM’s FSRA. This is one of the most advanced digital asset frameworks out there, but there is no doubt that they expect true compliance.
Launch the Payment App
Do you want to make a lot of money? The central bank will keep an eye on you. Don’t expect to use a touch when handling customer funds.
Try to do all this
No. Founders usually want to build the entire product at once, which may be the secret to regulate sexual burnout. It’s much better to start narrowing – get a license, create traction, and then expand.
Best Practices
The founder who made the regulatory structure a core element of its listing strategy was the founder who had succeeded in the UAE.
Success requires a thorough regulatory assessment from the outset, namely, business models with the right jurisdiction, authority and cooperation with legal experts who truly understand the local landscape.
In the UAE, it cannot be bent. Founders who plan carefully and actively participate in the regulatory body will receive rewards for speed, clarity and access to a highly supported ecosystem.
Opinion: Irina Heaver, crypto lawyer.
This article is for general information purposes and is not intended to be considered legal or investment advice. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent Cointelegraph’s views and opinions.
