Crypto
Jun 30, 2025
As interest in cryptocurrencies continues to grow, so do the regulations governing them. The UAE Crypto landscape has swiftly emerged as a global crypto hub, drawing in numerous new businesses and investors. However, this rapid expansion brings increased regulatory oversight, presenting challenges for those aiming to seize opportunities in this sector. VARA regulations are designed to offer a clear framework for operating crypto businesses in the UAE, but navigating them can be daunting, especially for newcomers. In this article, we’ll explore VARA regulations, their implications for your business, and the essential steps required to ensure compliance—supported by insights from Ape Law's web3 legal experts.
Table of Contents
Benefits of the VARA License
1. VARA License Provides Legal Assurance for Your Business
Obtaining a VARA license enables your business to operate legally under Dubai's local laws. Every business is subject to oversight and regulation, and the VARA license signals your adherence to the local authorities.
2. VARA License Increases Investor Trust
Operating with a VARA license increases your business’s credibility among investors. In an industry that suffers from a bad reputation due to the actions of a few unscrupulous players, your compliance with local regulations will assure investors that you operate a transparent business.
3. VARA Offers a Supportive Business Environment
The VARA has a clear mandate to help businesses succeed. The authority achieves this by providing a supportive environment for firms to help them innovate and develop their products and services.
4. VARA Offers Different Licensing Options to Businesses
Each crypto business is unique and has different needs. The VARA understands this and offers various licensing options according to the diverse needs of the industry. This approach enables new firms to select a license that aligns with their objectives and operational needs.
5. VARA Has Set Cybersecurity Policies to Protect Firms
The VARA has implemented various cybersecurity policies to protect businesses associated with virtual assets. These regulations are designed to ensure that licensed firms operate securely and keep both their systems and clients safe from hacks and breaches.
6. VARA Offers Training for Licensed Firms
The VARA offers various training sessions for licensed companies to ensure they comply with all relevant regulations. The firms are also required to train their employees and management to keep pace with the rapidly evolving industry of virtual assets.
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Who Should Get a VARA License
1. Who Needs a VARA License? Let's Find Out!
The VARA license is required for a broad range of virtual asset activities, including advisory services and crypto exchanges. Understanding the scope of VARA regulations is crucial for any business planning to operate in the virtual asset sector in Dubai. The following overview outlines several activities that require a VARA license.
2. VA Advisory Services: Expert Guidance on Virtual Assets
The VARA license is required for firms providing advisory services related to virtual assets. This includes offering clients recommendations on virtual asset transactions and investments. When delivering these services, VARA regulations require firms to consider the following factors:
The client’s knowledge and experience in virtual asset investments.
The client’s financial goals, objectives, risk profile, and investment timeline.
The client’s financial circumstances and ability to handle sudden losses in virtual asset investments.
3. VA Broker-Dealer Services: Facilitating Transactions Between Clients
A VARA license is required for virtual asset broker-dealers that facilitate trading activities between clients. Specifically, the following activities require licensing:
Transmitting orders for buying or selling VAs;
Soliciting or accepting orders for virtual assets and accepting fiat currency, or other virtual assets, for such orders;
Arranging transaction matching between market players;
Entering into virtual asset transactions as a dealer on behalf of the entity for its account;
Market-making activities using client assets; or
Providing placement, distribution, or other related services to virtual asset issuers.
4. VA Custody Services: Secure Storage for Virtual Assets
Businesses that offer secure storage solutions for virtual assets to ensure their safekeeping must obtain a VARA license to operate in Dubai.
5. VA Exchange Services: Trading Platforms for Virtual Assets
A VARA license is required for any platform that operates as a virtual asset marketplace. This includes activities such as:
Matching orders between buyers and sellers and conducting an exchange, trade or conversion between a) virtual assets and fiat currency or b) one or more virtual assets; or
Maintaining an order book.
6. VA Lending and Borrowing Services: Facilitate Virtual Asset Leverage
Companies that enable the lending and borrowing of virtual assets, allowing users to leverage their holdings, are required to obtain a VARA license to operate in Dubai.
7. VA Management and Investment Services: Portfolio Management for Virtual Assets
Firms that manage investment portfolios, including virtual assets, catering to both retail and institutional clients, are required to hold a VARA license to operate in Dubai. This includes the following:
Asset management services for virtual assets; and
Taking responsibility for the staking of virtual assets to earn fees or other amounts paid to validators and/or node operators of a proof-of-stake distributed ledger technology.
8. VA Transfer and Settlement Services: Ensuring Efficient Virtual Asset Transactions
Businesses responsible for the transfer and settlement processes of virtual asset transactions, ensuring efficient and secure operations, are required to obtain a VARA license to operate in Dubai.
9. NFT Marketplace Services: Buying and Selling Non-Fungible Tokens
Entities operating platforms for buying, selling, or trading non-fungible tokens (NFTs) may require specific VARA licenses depending on their activities.
Meet Ape Law: Your New Best Friend for Setting Up a Crypto Business in the UAE
Setting up a crypto business in the UAE can be complex, but Ape Law makes it seamless. As Web3-native legal experts, we handle crypto licensing, business structuring, and compliance so you can focus on growth. Whether you're launching a new coin, token, and/or NFT, expanding operations, or optimizing for tax efficiency, our team ensures a smooth and legally sound setup. Ready to establish your business in the UAE? Book a free consultation today to navigate the legalities of setting up a Web3 business in the UAE with ease!
VARA Regulations and Legal Framework
1. Legal Foundation: Empowering VARA
Dubai’s Law No. 4 of 2022—dubbed the Dubai VA Law—allows VARA as the sole regulator of virtual assets across Dubai mainland, free zones, and special development zones, excluding DIFC. VARA operates under the umbrella of Dubai World Trade Centre Authority with explicit objectives including building Dubai as a virtual asset hub, protecting investors, combating illicit activity, and ensuring global interoperability.
2. The 2023 Regulations & Core Principles: A Look at the Basics
The Virtual Assets and Related Activities Regulations 2023 (effective Feb 7, 2023) codify VARA’s supervisory and enforcement potential across all VA activities. Built on five key regulatory principles: market integrity & stability, including FATF compliance; consumer protection—emphasis on informed consent; technology neutrality & innovation; regulatory resilience (principles-based model); efficiency and proportionality—minimum burden for VASPs.
3. Structuring Regulation: Rules, Directives & Guidance
VARA’s rule-making toolbox includes: Rules – binding, published in Regulations or Rulebooks; Directives – mandatory orders to specify VASPs (e.g., capital limits, reporting frequency), communicated privately or publicly; Guidance – non-binding explanations or best-practice advice. VARA can modify, interpret, waive, or revoke any of these tools at its discretion.
4. Licensing & Activity-Specific Rulebooks: Get Your License
VARA issues rulebooks by activity, including advisory, broker-dealer, custody, exchange, lending, asset management, transfer and settlement, and issuance. All entities must be licensed (or exempt with notification) before conducting VA activities. VARA holds absolute discretion to grant, suspend, or revoke. Professional incidental activities (e.g., lawyers, accountants), public entities, and proprietary traders investing $ 250 million or more must register with VARA. Before February 2023, operators could transition via legacy permits, aligning with complete requirements over time.
5. AML/CFT Framework: What to Expect
VARA’s rulebooks incorporate detailed AML/CFT requirements, including FATF travel-rule compliance, due diligence on beneficial owners, PEP checks, and sanctions screening. VASPs must maintain robust compliance programs, including risk-based controls, audits, and supervision.
6. Marketing & Conduct Standards: Regulations for Advertising
The 2023 Regulations (Part VII) introduced strict rules for marketing, which were further revised in the 2024 Guidance. Only licensed entities are permitted to promote VAs. Advertising must disclose material risks, be fair, transparent, balanced, and not misleading, with prohibitions on exaggerated return claims and aggressive tactics. Non-compliance is tiered with penalties: from administrative fines to criminal sanctions or license revocation.
7. Rulebook Updates (May 2025): New Regulations on the Horizon
On 19 May 2025, VARA released Rulebooks v2.0 with key enhancements. Supervisory controls have been tightened across all activity sectors, with stricter margin-trading and token-distribution rules, as well as mandatory harmonized compliance. Issuance framework overhaul: streamlined Category 2 issuance (no prior approval) but requires licensed distributors; new ‘exempt VA’ and expanded asset-referenced tokens. Technology & cybersecurity rulebook requirements: VASPs must implement governance frameworks, appoint CISOs, embed defense-in-depth, conduct annual policy reviews, and engage in risk assessments. A 30-day transition window for compliance, with a deadline of June 19, 2025.
8. Enforcement & Supervision: VARA’s Reach
VARA’s supervision includes: on-site/off-site exams, enforcement actions, fines, license changes; mandatory reporting on UBOs, suspicious transactions, cybersecurity incidents; cooperation with SCA and other UAE bodies on joint licensing, passportability, AML/CFT.
How to Get a VARA License in 6 Simple Steps
1. Get Your VARA License With Ape Law
Setting up a crypto business in the UAE can be complex, but Ape Law makes it seamless. As Web3-native legal experts, we handle crypto licensing, business structuring, and compliance so you can focus on growth. Whether you're launching a new coin, token, and/or NFT, expanding operations, or optimizing for tax efficiency, our team ensures a smooth and legally sound setup. Ready to establish your business in the UAE? Book a free consultation today to navigate the legalities of setting up a Web3 business in the UAE with ease!
2. Initial Disclosure Questionnaire
The Virtual Asset License application process commences with the Initial Disclosure Questionnaire. This represents your initial formal correspondence with VARA, or the Virtual Assets Regulatory Authority, and forms a significant part of your application. You will be requested to provide early-stage information about your business, including but not limited to its structure, operational objectives, and the proposed virtual asset activity in which it will engage. This will enable VARA to understand your intention and determine whether you are suitable for licensing. Transparent details are required in your application.
3. Development Of Business Plan
A comprehensive business plan is the next significant step, providing an opportunity to showcase your vision. Your business plan shall include:
Operational Intentions
Clearly describe what your business will seek to achieve in the virtual assets space.
Financial Forecasts
Provide realistic projections of your revenue, expenses, and profitability. This will help VARA assess the financial viability of your enterprise.
Integration Strategy
Describe how you will integrate cryptocurrency into your operation, including any unique services or products to be offered. A well-written business plan depicts not only your preparedness but also your commitment to ethical behavior and compliance within the Virtual Asset industry.
4. Ownership and Management Information
Complete information regarding beneficial owners and principal management of your company is mandatory. This shall include:
Identity Verification
Provide documents verifying the identities of your business owners and key executives.
Background
Emphasize their qualifications and experience as related to the given industry, as well as any relevant expertise in operating a virtual asset. Ownership and management transparency are essential at VARA. Transparency breeds trust, and those responsible for running the business should be capable of meeting the regulatory requirements set.
5. Payment of Fees
Payment of initial fees, typically 50% of the license application fee, will be requested to initiate the review process for your application. Payment of initial fees is a crucial requirement in this process, demonstrating your commitment to obtaining the VARA license. Keep a record of this transaction, as you may be called upon to provide proof of such a payment during the review process.
6. Initial Approval
Once you have submitted your Initial Disclosure Questionnaire and business plan with the associated fees, you'll await initial approval at the hands of VARA. Once this is received, you can make the following key final steps:
Legal Incorporation
Incorporate your business under relevant laws and regulations in Dubai.
Operational Setup
Rent office space, establish necessary technology infrastructure, and hire any required skilled personnel. It is essential to note that before the final VARA license is issued, your firm shall not operate in any activity considered a Virtual Asset. Use this time to set up the operational foundation correctly.
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Book a Free Consultation to Navigate the Legalities of Setting up a Web3 Business in the UAE
Setting up a crypto business in the UAE can be complex, but Ape Law makes it smooth. As Web3-native legal experts, we handle crypto licensing, business structuring, and compliance so you can focus on growth. Whether you’re launching a new coin, token, and/or NFT, expanding operations, or optimizing for tax efficiency, our team ensures a smooth and legally sound setup. Ready to establish your business in the UAE? Book a free consultation today to navigate the legalities of setting up a Web3 business in the UAE with ease!
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