Dubai regulator bans anonymous cryptocurrencies

There are fines for non-compliance with the new rules

08.02.2023 - 12:00

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What’s new? Dubai’s Virtual Asset Regulatory Authority (VARA) has banned the issuance of anonymous cryptocurrencies such as Zcash (ZEC) and Monero (XMR). Violations carry fines of 20 million dirhams (~$5,4 million) for individuals and 50 million dirhams (~$13,6 million) for businesses working with digital assets, such as crypto exchanges. VARA defines cryptocurrencies that enhance anonymity as those that prevent ownership or transaction tracking.

VARA’s rules

What else do the new rules say? All organizations working with cryptocurrencies and traders investing $250 million or more in digital assets must register with VARA. The regulator can revoke a license if insolvency or violations of directives are established, and it can set fees ranging from 40 000 dirhams to 200 000 dirhams (~$10 890-$54 450).

The VARA’s provisions apply not only within the emirate of Dubai but also in its special development zones and free zones — except for the Dubai International Financial Center (DIFC), which is regulated by another body.

In 2022, Dubai Multi Commodities Center (DMCC) attracted 3049 crypto startups, which became a record, and their total number exceeded 22 000.

In August, VARA approved rules for advertising cryptocurrencies, which, among other things, prohibit misleading investors about the profitability of projects.

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