Dubai’s Virtual Assets Regulatory Authority (VARA) has issued a directive that could reshape the emirate’s crypto landscape. By June 19, 2025, all licensed digital asset companies must align with VARA’s newly unveiled Version 2.0 Rulebooks. The updated rules, announced today, are designed to bolster market integrity and tighten risk oversight—a move that signals Dubai’s intent to emerge as a global leader in crypto regulation.
Strengthened Oversight: A New Era for Compliance
VARA’s revised guidelines encompass a broad range of activities, from advisory and broker-dealer services to custody, exchange, and virtual asset (VA) management. The authority is determined to harmonize compliance standards across these sectors, ensuring that definitions like “client assets,” “qualified custodians,” and “collateral requirements” are uniformly understood and applied.
A spokesperson for VARA highlighted the importance of these changes in reducing ambiguity and facilitating cross-functional compliance. “The aim was to simplify navigation for VASPs, especially where activities overlap,” the spokesperson noted. This clarity is essential for companies striving to adhere to global regulatory best practices. For a broader perspective on regulatory simplification, see how the SEC can learn from the IRS.
Margin Trading and Token Distribution: A Closer Look
Margin trading, a high-stakes game that allows traders to control substantial positions with minimal capital, has come under tighter scrutiny. VARA has lowered leverage thresholds and mandated clearer collateralization standards, all while enhancing monitoring obligations for service providers. These adjustments are designed to prevent market upheavals during downturns, a lesson learned from past crypto market tumbles.
In addition, the new Rulebooks introduce specific guidelines for token distribution, setting out licensing prerequisites, investor protections, and marketing restrictions. The focus on “retail-facing offers” reflects VARA’s commitment to aligning with global conduct expectations. “It’s about closing gaps we’ve observed and ensuring investor safety,” the VARA representative emphasized.
A Strategic Move in a Global Context
This regulatory overhaul places Dubai at the forefront of a broader international trend towards stricter crypto regulations. As the crypto sector continues to evolve, authorities worldwide are grappling with the challenge of crafting rules that protect investors without stifling innovation. Dubai’s proactive approach could serve as a model for others, demonstrating a balance between regulatory rigor and market dynamism. This mirrors efforts in other regions, such as the UK’s FCA seeking public and industry views on crypto regulation.
However, the path forward isn’t without its hurdles. The 30-day transition period, while aligned with global standards, poses a significant challenge for some companies. Adjusting to the new requirements will demand both time and resources, and not all players are equally equipped. Those who succeed in adapting may find themselves well-positioned to capitalize on Dubai’s burgeoning crypto market.
Looking Ahead: What’s Next for Dubai’s Crypto Scene?
With the June deadline fast approaching, the next month promises to be a period of intense activity for Dubai’s crypto firms. The race is on to meet VARA’s new standards, and companies that lag behind risk falling afoul of regulatory expectations. Yet, for those that do comply, the rewards could be substantial, as they gain the confidence of both regulators and investors.
The implications of VARA’s regulatory enhancements extend beyond Dubai’s borders. As the emirate cements its status as a crypto-friendly hub, other jurisdictions may look to Dubai as a benchmark for their regulatory frameworks. The question remains: will Dubai’s bold regulatory steps pave the way for a new era of crypto innovation, or will they inadvertently stifle the very growth they aim to foster?
Only time will tell how these new rules will shape the crypto ecosystem in Dubai and beyond. But one thing is clear: Dubai’s commitment to robust regulation underscores its ambition to be a leader in the global digital asset arena. As the June deadline looms, all eyes will be on Dubai to see how these changes play out in practice, and what lessons can be learned for the rest of the world.
Source
This article is based on: Dubai regulator sets compliance deadline for updated crypto rules
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
