• Dubai’s virtual asset authority has prohibited the use of privacy coins such as Monero (XMR) and ZCash (ZEC).
• The regulator sets licensing and authorization requirements for firms that want to operate in Dubai.
• Companies that do not follow the new rulebook may be fined, per violation and depending on the offense, with fines ranging from AED 8m ($2.2m) to AED 50m ($13.6m).
Dubai Takes a Stand Against Privacy Coins
Dubai’s virtual asset authority has prohibited the use of privacy coins such as Monero (XMR) and ZCash (ZEC), as well as any activities related to the coins. According to the new set of crypto regulations, “The issuance of Anonymity-Enhanced Cryptocurrencies and all VA Activity[ies] related to them are prohibited in the Emirate.” The document titled ‘The Virtual Assets and Related Activities Regulations 2023’ was published on February 7, stating that it set out the regulatory framework governing virtual assets and all related activities in the nation.
Definition of Anonymity-Enhanced Cryptocurrencies
The regulator defines these “Anonymity-Enhanced Cryptocurrencies” as”Means a type of Virtual Asset which prevents the tracing of transactions or record of ownership through distributed public ledgers and for which the VASP has no mitigating technologies or mechanisms to allow traceability or identification of ownership.” The Dubai Virtual Assets Regulatory Authority (VARA) is authorized by Regulating Virtual Assets in the Emirate of Dubai (Dubai VA Law) to regulate Virtual Assets and Virtual Asset Service Providers (VASPs).
Requirements for Crypto Firms
VARA has specified requirements for crypto firms to pass before they can operate in the country. These pertain to anti-money laundering and combating terrorism, marketing regulations, and market offenses such as insider trading and market manipulation. Additionally, VARA has been given full power to make decisions and adapt laws related to crypto-assets where it sees fit.
Penalties for Noncompliance
Companies that do not follow the new rulebook may be fined, per violation and depending on the offense, with:between AED 8m ($2.2m)