Dubai's cryptocurrency regulatory authority has mandated that licensed digital asset companies comply with an updated rulebook by June 19, 2025, to enhance market integrity and risk oversight.
VARA Introduces Rulebook 2.0
On May 19, the Dubai Virtual Assets Regulatory Authority (VARA) released Version 2.0 of its regulatory framework. Key updates include:
- Stricter controls on margin trading and token distribution services.
- Standardized compliance requirements across all licensed activities.
- Clearer definitions for staked wallet arrangements.
VARA will engage directly with licensed entities during a 30-day transition period, after which full adherence to the updated rules is expected.
"Aligned with global regulatory best practices, all affected Virtual Asset Service Providers (VASPs) must achieve full compliance by June 19, 2025," stated VARA in its announcement.
Enhanced Oversight Mechanisms
VARA has expanded its supervision of regulated activities, including:
✅ Advisory services
✅ Broker-dealer operations
✅ Custody solutions
✅ Exchange platforms
✅ Lending protocols
✅ VA management & investment services
✅ VA transfer & settlement systems
A VARA spokesperson clarified that the updates ensure uniform definitions for core operational terms like "client assets," "qualified custodians," and "collateral requirements."
Margin Trading Leverage Adjustments
The regulator tightened leverage thresholds for margin trading, requiring:
- Clearer collateral standards
- Enhanced monitoring obligations for VASPs offering these services
👉 Why leverage limits matter for crypto market stability
Margin trading amplifies both gains and losses by allowing traders to control large positions with minimal capital. Lower leverage limits help mitigate risks of cascading liquidations during market downturns.
New Token Distribution Guidelines
VARA added a dedicated section for token distribution, outlining:
📌 Licensing prerequisites
📌 Investor safeguards
📌 Marketing restrictions (especially for retail-targeted products)
"These changes address observed regulatory gaps and align with international conduct standards," the spokesperson noted.
FAQs
Q1: What happens if a VASP misses the June 19 deadline?
A: Non-compliant entities may face penalties, including license suspensions or revocation.
Q2: How do the new rules impact staking services?
A: Staking providers must now adhere to stricter wallet definitions and transparency requirements.
Q3: Are decentralized platforms affected?
A: Currently, VARA’s rules apply only to licensed centralized entities operating in Dubai.
👉 Explore compliant crypto services in Dubai
The updated framework reflects Dubai’s commitment to becoming a globally trusted crypto hub while balancing innovation with investor protection.