5 Things to Remember About New Crypto Asset Regulation in UAE
Posted by Al Rowaad Advocates & Legal Consultants on May 8th, 2022
As a progression towards a digital UAE, the government has recently released a draft law for regulating and allowing dealing in cryptocurrency within the country. The most-awaited law for commercial markets has now finally been released initially as a draft and later to be officially published. The issuing and offering of Crypto Assets Law (Crypto-Assets Law) has been designed to govern the issuances, licensing, promotion, business conducts and other economic activities related to crypto-assets. The Securities Commodities Authority has released the law on their website for which the Commercial Lawyers of Dubai will provide you a brief insight for your perusal.
Who All Should be Concerned?
The primary discussion while reviewing this new regulation is to understand the applicability of the law on individuals residing in UAE and those are dealing in crypto-assets as dealers or otherwise. The regulation will be applicable on those who:
It is indeed important to note that the law exclude certain assets from the very scope of new Crypto-Asset Regulation, which are as follows:
The new Regulations mandates the dealer to establish an incorporation either in UAE or an FFZ or a corporation with the state, which will further allow them to issue security tokens. The SCA will issue approvals for all such companies and in addition, the authority will maintain a register for recognised crypto currencies (for which commodity tokens will be issued) and further guidance for governing and recognising commodity tokens will be issued by the authority post issuance of this new regulation.
Additionally, the authority will have the power to regulate fundraising platforms for crypto-assets which allows the investors to subscribe crypto-assets, with a subscription limit of AED 50,000. This concept is alternatively referred to as Initial Coin Offering. Apart from the foregoing, the SCA has maintained a standard rules and regulation for the dealers and investors of crypto-assets to effectively regulate this channel of investment whilst being internationally updated.
Corporate Lawyers of Dubai believes that this new Regulation is a welcome growth in UAE’s technical and financial market. It will indeed offer increment in investment opportunities in the country and will represent UAE as a progressive commercial sector amongst other nations. This Law will offer certainty for crypto-businesses in the onshore market.
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About the AuthorAl Rowaad Advocates & Legal Consultants
Joined: February 3rd, 2021
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