UAE legal experts have issued a report analysing the regulations for virtual assets in the UAE.
The report, titled “Virtual Assets Regulatory Framework: An Evolving Landscape”, comes as the MENA region has been identified as the world’s fastest growing cryptocurrency market.
As per a 2022 report by Chainalysis, MENA users received $566bn in cryptocurrency from July, 2021 to June, 2022. It represents a 48% increase compared to $272bn cryptocurrency value received in the previous year.
UAE crypto regulations
Within the MENA region, UAE is the fifth largest cryptocurrency market. Dubai has become a hub for virtual asset service providers that serve customers across Asia and Africa, not just in the Middle East.
The growth of the crypto market within UAE has acted as a driving force for the UAE regulators to take significant steps towards developing a regulatory framework for the digital assets sector.
KARM Legal Consultants, a law firm specialising in blockchain, cryptocurrency, Web3 and fintech in the UAE has, in collaboration with prominent legal experts from Hess Legal Counsel, MME and Nagele Attorneys, published a report analysing the regulatory landscape for virtual assets in various jurisdictions.
As the use of blockchain technology and its use cases continue to grow, so does the need for regulation. In the past few years, several positive regulatory developments for the virtual assets sector have been witnessed, as many jurisdictions globally have started to recognize virtual assets services.
With overall favourable regulatory ecosystems the UAE has cemented its position as a leading virtual assets friendly jurisdiction.
The regulatory frameworks in most markets focus on aspects of business such as token classifications, custody of private and public keys, wallet configurations and client suitability assessments.
As regards the UAE, KARM’s report provides an overview of regulations issued by the federal, emirate level and free zone authorities.
The report covers various licensing options available for virtual assets activities, token classifications, compliance requirements and capital requirements.
The UAE was one of the first jurisdictions globally to introduce a regulatory framework governing virtual assets activities.
With several initiatives supporting the sector, the UAE has transformed into a global hub for virtual asset service providers.
Kokila Alagh, Founder of KARM Legal Consultants, said: “We are pleased to have compiled and published this report, which we hope will contribute to the ongoing conversations around the regulatory landscape for virtual assets.
“As the world of blockchain and cryptocurrency continues to evolve, it is crucial to keep up with the latest developments and understand how they impact the industry,” she added.
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