Dubai’s regulator releases updated rules for crypto brokers and exchanges

What’s new? The Dubai Virtual Assets Regulatory Authority (VARA) has updated its set of trading rules. The regulator has introduced stricter requirements for leverage and collateral controls in its rulebooks for broker-dealers and exchanges. According to the press release, this will bring the rules in line with global standards for risk control.

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What else is known? VARA also unveiled sections of its rulebook to properly oversee areas of the crypto industry that were previously lightly regulated, such as broker-dealers and wallets.

The rules previously laid out by VARA helped the city become a crypto hub and have been praised by industry firms. Major exchanges such as Binance, Crypto.com, and OKX have received approval under VARA.

VARA is now updating the rules to reflect a more mature market structure that incorporates real-world licensing experience and international best practices, the press release noted

“These rulebook updates reinforce the foundations of a responsible, scalable ecosystem,” said Ruben Bombardi, General Counsel and Head of Regulatory Enablement at VARA.

The regulator has given licensed firms until June 19 to bring their operations into compliance with the new rules. The VARA team will engage with licensed entities and expects them to comply with the updated rules after the 30-day transition period.

According to the statement, VARA strengthened oversight of margin trading and token distribution services, harmonized compliance requirements across all licensed activities, and provided clearer definitions for collateral wallet arrangements.

The rules strengthened oversight mechanisms for several regulated activities, including advisory, broker-dealer, custody, exchange, lending and borrowing services, virtual asset management and investment, and transfer and settlement services.

The updates will bring consistency to all activity-based rules affecting key operational terms such as “client assets,” “qualified custodians,” and “collateral requirements,” which have been consistently defined in the update.

The update also harmonized risk management and disclosure obligations where activities overlap, in areas such as brokerage, custody, and exchange.

“The aim was to reduce ambiguity and help VASPs navigate cross-functional compliance more easily,” VARA told Cointelegraph.

Regarding margin trading, a VARA spokesperson said they have tightened leverage thresholds, introduced clearer collateral standards, and strengthened monitoring obligations for VASPs offering this feature.

Margin trading allows traders to control large positions with smaller amounts of capital. It amplifies both gains and losses. Tighter controls on leverage used by traders helps limit the risks of large-scale liquidations in a market downturn.

The cryptocurrency regulator also unveiled a new section on token distribution, outlining licensing prerequisites, investor protections and marketing restrictions, especially for “retail-focused offerings.”