Dubai regulator to consider reducing financial burden on small crypto companies
The CEO of VARA has admitted that compliance costs are too high
11.04.2024 - 13:20
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3 min
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What’s new? Dubai’s Virtual Asset Regulatory Authority (VARA) intends to create a more comfortable environment for small crypto companies by reducing the financial cost of maintaining local compliance. VARA CEO Matthew White is considering an option whereby larger firms will act as hosts for smaller ones and take on the costs.
What else is known? White acknowledged that compliance is costly, and VARA is looking for ways to reduce the financial burden on smaller firms by making the new regulatory regime convenient for everyone. “We don’t pretend to know everything as a regulator,” he noted.
Under his proposed new structure, compliance costs would be borne by larger system players, allowing smaller players to enter the ecosystem while remaining regulated without suffering from high costs. Consideration of such issues is part of the regulator’s journey to innovate in the development of regulations. The official said VARA continues to engage with the industry to understand its needs.
White replaced Henson Orser as CEO of VARA last November after the UAE tightened crypto regulation by introducing fines for unlicensed crypto service providers.
VARA was established in March 2022 to license crypto firms. Operating permits are issued if they have a branch in the UAE. In August of the same year, the regulator approved rules for advertising crypto projects, obliging them to provide factually accurate information and not to mislead investors, and in February 2023 introduced fines for the use of anonymous cryptocurrencies.
The first VARA-licensed crypto company was the Binance exchange, followed by custodians Komainu and Hex Trust, as well as exchanges Crypto.com and OKX.
In April this year, exchange Deribit announced that it was moving its global headquarters to Dubai and obtaining a VARA license.
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In addition, in early 2023, the authorities of the emirate of Ras Al Khaimah opened a free economic zone for crypto companies called RAK Digital Assets Oasis (RAK DAO).
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