November 1, 2022
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1. Introduction
In March 2022, the Dubai Financial Services Authority (“DFSA”) published Consultation Paper No. 143 proposing to allow for the provision of financial services in relation to “Crypto Tokens” in and from the Dubai International Financial Centre (“DIFC”).
Following the ending of the consultation period, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, the Ruler of Dubai, has enacted legislation and the DFSA Board has made amendments to the DFSA Rulebook each taking effect on 1 November 2022.
The new Crypto Tokens regime augments the DFSA’s existing Investment Tokens regime which was introduced on 25 October 2021. We discussed the Investment Tokens regime in a previous Client Alert.[1]
The new DFSA Crypto Tokens regime is detailed. Significant changes have been made to many of the rules and modules that form the DFSA Rulebook. In this Client Alert, we set out a summary of the key changes that have been made.
2. Summary of the DFSA Crypto Tokens Regime
3. Concluding Remarks
The new DFSA Crypto Token regime is a momentous step forward augmenting the DFSA’s existing Investment Tokens regime introduced in 2021. With the new regime in place, the DFSA has completed its ambitious project to create a thoughtful framework covering the panoply of “crypto” assets.
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[1] Gibson Dunn Client Alert dated 15 November 2021 entitled Dubai Financial Services Authority Moves into the “Crypto” Space and Establishes Regulatory Framework for “Investment Tokens” (https://www.gibsondunn.com/dubai-financial-services-authority-moves-into-crypto-space-and-establishes-regulatory-framework-for-investment-tokens/).
[2] Rule A2.5.1 of the DFSA Rulebook (General Module).
[3] Rule 3A.2.1 of the DFSA Rulebook (General Module).
[4] Rule 3A.4.1(2) of the DFSA Rulebook (General Module).
[5] Rule 3A.3.7 of the DFSA Rulebook (General Module).
[6] Rule 3A.2.2 of the DFSA Rulebook (General Module).
[7] Rule 3A.2.3 of the DFSA Rulebook (General Module).
[8] Rule 3A.2.4 of the DFSA Rulebook (General Module).
[9] Rule 3A.2.5 of the DFSA Rulebook (General Module).
[10] Rule 2.2.10F of the DFSA Rulebook (General Module).
[11] Rule 2.26.1(4) of the DFSA Rulebook (General Module).
[12] Rule 7.2.2(7) of the DFSA Rulebook (General Module).
[13] Rule 11.10.21 of the DFSA Rulebook (General Module).
[14] Rule 15.5.1 of the DFSA Rulebook (Conduct of Business Module).
[15] Rule 15.5.3(2) of the DFSA Rulebook (Conduct of Business Module).
[16] Rule 15.6.2 of the DFSA Rulebook (Conduct of Business Module).
[17] Rule 3.4.2 of the DFSA Rulebook (Conduct of Business Module).
[18] Rule 15.6.3 of the DFSA Rulebook (Conduct of Business Module).
[19] Rule 15.6.4 of the DFSA Rulebook (Conduct of Business Module).
[20] Rule 15.6.5 of the DFSA Rulebook (Conduct of Business Module).
[21] DFSA Rulebook (Collective Investment Rules).
[22] DFSA Rulebook (Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Module).
[23] Rule 10.5.1 of the DFSA Rulebook (General Module).
[24] Guidance to Rule 10.5.1 of the DFSA Rulebook (General Module).
The following Gibson Dunn lawyer prepared this client update: Hardeep Plahe.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. If you wish to discuss any of the matters set out above, please contact any member of Gibson Dunn’s Crypto Taskforce (cryptotaskforce@gibsondunn.com) or the Global Financial Regulatory team, including the following:
Hardeep Plahe – London and Dubai (+44 (0) 20 7071 4282, +971 (0) 4 318 4611, hplahe@gibsondunn.com)
William R. Hallatt – Hong Kong (+852 2214 3836, whallatt@gibsondunn.com)
Michelle M. Kirschner – London (+44 (0) 20 7071 4212, mkirschner@gibsondunn.com)
Jeffrey L. Steiner – Washington, D.C. (+1 202-887-3632, jsteiner@gibsondunn.com)
© 2022 Gibson, Dunn & Crutcher LLP
Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.
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