• The United Arab Emirates has passed a new federal law regulating virtual assets.
• Failure to comply with the law could lead to hefty fines of $2.7 million, disgorgement of profits, and criminal investigation by the public prosecutor.
• The new law is expected to come into force on Jan. 14, 2021, and will require crypto entrepreneurs operating in the country to conform.
The United Arab Emirates has taken a huge step forward in the world of cryptocurrency and blockchain technology with the passing of a new federal law that regulates virtual assets. This new law will ensure that entities engaging in crypto activities must secure a license and approval from the new regulator, or face serious consequences. Failure to comply with the law could lead to a hefty fine of up to $2.7 million, disgorgement of profits, and even criminal investigation by the public prosecutor.
The law is set to come into effect on Jan. 14, 2021, and will require crypto entrepreneurs operating in the country to comply with all existing laws. This means that all crypto and Web3 projects operating in the UAE must find a way to adhere to the new federal law. Irina Heaver, a UAE-based crypto and blockchain lawyer, said that the new law not only helps protect investors, but also provides the government with a better understanding of the crypto space.
The new federal law is just the latest step the UAE has taken in regulating digital assets. Last year, Dubai established its own crypto regulator called the Virtual Asset Regulatory Authority (VARA), as well as several supervisory initiatives for digital assets in economic free zones like the Abu Dhabi Global Market (ADGM).
The new law is expected to open up the UAE to the world of crypto and blockchain technology, and create a platform for innovation and growth in the region. It will also enable the government to better track and monitor crypto activities, which could help prevent potential scams and money laundering.
Overall, the passing of this new federal law regulating virtual assets marks a major milestone in the development of the UAE’s crypto space, and should bring increased security and stability to the industry. With the new law in place, the UAE will be better prepared to face the challenges of the ever-evolving crypto space, and will be well positioned to become a major player in the global cryptocurrency market.