SCA Opens Virtual Asset Service License Applications in UAE

Fazzaco learned that the Securities and Commodities Authority (SCA), the financial regulator of UAE, announced this Wednesday that it started receiving license applications from companies wishing to provide virtual asset services following the approval of its board of the decision regulating virtual asset service providers.

At last year's end, the UAE Cabinet issued Resolution No. 111 of 2022 Regulating Virtual Assets and Virtual Asset Service Providers, which mandated that the SCA shall have the jurisdiction to issue decisions to regulate virtual asset transactions and license virtual asset service providers.

All UAE-based crypto firms are now required to file their license application with the SCA, exceptions are those licensed to operate in the free zones. Companies operating in the emirate of Dubai, on the other hand, should submit their license application to the VARA in addition to seeking the SCA's approval according to uniform procedures developed to facilitate and expedite the licensing process.

According to the SCA website, the decision regulating virtual asset platform operators contains nine articles, including Article 3, which bans trading virtual assets in the UAE unless licensed by the SCA and/or the competent authority.

Article 4 sets out the functions of operators while Article 5 provides for the obligations, including operational efficiency and resilience and the creation and maintenance of operational rules that must satisfy a set of standards outlined in the decision.

Article 4 also covers integrity, transparency, and professional conduct; virtual asset protection system and measures; compliance and discipline measures, systems, and procedures; rules and procedures for fair, orderly, and effective operation to regulate trading; and the regulation of access to services through the establishment of procedures that guarantee access by those authorized only. More details can be learned at the regulator's website.