Dubai regulator sets compliance deadline for updated crypto rules

Dubai’s Virtual Assets Regulatory Authority (VARA) has mandated that all licensed digital asset companies must comply with updated Rulebooks by June 19, 2025. These updated Rulebooks, Version 2.0, aim to bolster market integrity and strengthen risk oversight within the burgeoning digital asset sector in Dubai.

The key changes introduced in Version 2.0 focus on several critical areas. Firstly, the Rulebooks enhance controls surrounding margin trading, a practice that allows traders to leverage larger positions with smaller capital investments. VARA has tightened leverage thresholds, implemented stricter collateralization standards, and increased monitoring obligations for VASPs offering margin trading services. This move aims to mitigate the risks associated with amplified gains and losses inherent in margin trading, particularly during market downturns.

Secondly, the updated Rulebooks introduce a new section specifically addressing token distribution. This section outlines licensing prerequisites, investor protection measures, and marketing restrictions, particularly for retail-facing offers. The emphasis on marketing restrictions reflects a broader global trend towards aligning with international conduct expectations and addressing observed regulatory gaps.

Thirdly, Version 2.0 harmonizes compliance requirements across all licensed activities, providing clearer definitions for various operational terms. This includes terms such as “client assets,” “qualified custodians,” and “collateral requirements,” aiming to reduce ambiguity and streamline cross-functional compliance for VASPs. The update also aligns risk management and disclosure obligations across overlapping activities like brokerage, custody, and exchange services.

VARA has granted a 30-day transition period to allow licensed entities to adapt to the new regulations. The regulator will actively engage with these entities to ensure full compliance by the June 19th deadline. This proactive approach underscores VARA’s commitment to fostering a robust and responsible digital asset ecosystem in Dubai, aligning with international best practices and enhancing investor protection.