The Virtual Assets Regulatory Authority (VARA) is Dubai's dedicated regulator for virtual assets and cryptocurrency businesses operating in the emirate. Setting out a comprehensive Virtual Asset framework and requiring licensure of Virtual Asset Service Providers through a two-step process, the agency imposes swift action against regulatory breaches.
VARA was established in March 2022 under Dubai Law No. 4 of 2022. Dubai became one of the first jurisdictions globally to introduce a standalone regulator dedicated exclusively to virtual assets, marking a significant milestone in the region's approach to digital finance.
VARA's jurisdiction covers Dubai mainland and free zones, excluding the Dubai International Financial Centre (DIFC), which remains under the Dubai Financial Services Agency (DFSA)'s oversight. Since its inception, VARA has issued multiple rulebooks governing licensing, conduct, compliance, and risk management, aligned with international regulatory standards such as those set by the Financial Action Task Force (FATF).
VARA is responsible for licensing, regulating, and supervising virtual asset activities in Dubai. The authority's core objectives demonstrate its commitment to building a sustainable, trusted digital asset ecosystem:
VARA adopts a risk-based, outcomes-focused supervisory approach, requiring firms to demonstrate that their controls operate effectively in practice—not just on paper.
VARA regulates Virtual Asset Service Providers (VASPs) conducting activities in or from Dubai. The scope is comprehensive, covering a wide range of business models and services:
Each activity requires specific authorization, and firms are subject to ongoing supervisory obligations once licensed. VARA's approach ensures that all participants in Dubai's virtual asset ecosystem meet consistent regulatory standards.
Under VARA's Company Rulebook, firms must establish strong governance arrangements that demonstrate clear accountability structures:
Firms must demonstrate ongoing suitability and accountability—not just point-in-time assessments. This continuous evaluation ensures that those in positions of responsibility maintain the integrity and competence required for their roles.
VARA's Compliance and Risk Management Rulebook aligns closely with UAE federal AML law and FATF standards. Firms operating under VARA's supervision must implement comprehensive financial crime controls:
Virtual asset-specific risks—such as rapid fund movement, cross-border exposure, and pseudonymity—are a key supervisory focus. VARA expects firms to move beyond static compliance checklists and adopt dynamic, behavior-based monitoring.
The Market Conduct Rulebook establishes rigorous standards for trading venues and trading firms:
These requirements ensure that Dubai's virtual asset markets operate with the same integrity standards expected in traditional financial markets.
Read About Taking a Holistic Approach to Trade Surveillance
VARA requires firms to take a comprehensive approach to identifying and managing conflicts:
This framework ensures that firms prioritize client interests and maintain the integrity of their operations.
Given the digital nature of virtual assets, VARA's Technology and Information Rulebook sets high standards for operational resilience:
These requirements recognize that in the digital asset space, technology isn't just an operational tool—it's a critical component of regulatory compliance.
VARA places particular emphasis on financial crime prevention, recognizing that digital asset firms face heightened exposure to:
As a result, VARA expects firms to move beyond static rules and adopt dynamic, behavior-based monitoring and screening controls that can adapt to evolving risk patterns. The speed and complexity of virtual asset transactions demand sophisticated, technology-driven compliance solutions.
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Between August 2024 and August 2025, VARA issued enforcement notices against 36 firms for violations including engaging in unlicensed virtual asset activities and unauthorized advertising and marketing of virtual asset services in Dubai. One case also involved failures in AML programme controls, governance deficiencies, and failure to disclose material information to the regulator.
Financial penalties have ranged from AED 50,000 to AED 600,000 (approximately $13,600 to $163,000 USD) per entity, calibrated to the seriousness and scope of violations. Under VARA's regulatory framework, maximum fines can reach up to AED 10 million ($2.7 million USD) for certain violations, with penalties potentially doubled for repeat offenses within one year. Enforcement measures have included cease-and-desist orders, financial penalties, public statements, and in one case, the appointment of a skilled person to oversee remediation.
MCO (MyComplianceOffice) delivers an integrated compliance platform that enables firms to meet VARA expectations efficiently and at scale. MCO's suite of solutions addresses each pillar of VARA's regulatory framework.
MCO's Know Your Transactions (KYT) solution enables firms to monitor and understand transaction behavior over time, supporting VARA's AML/CFT expectations through:
By combining traditional transaction monitoring capabilities with virtual asset-specific features, KYT helps firms stay ahead of emerging typologies and demonstrate effective controls to VARA.
MCO's Know Your Third Party (KYTP) solution helps firms demonstrate that they understand not just who their customers are, but also the full ecosystem of third-party relationships that could introduce risk. This comprehensive approach to due diligence supports VARA's emphasis on understanding and managing the complete risk picture.
MCO's third-party screening capabilities support VARA requirements by enabling:
These controls are critical for preventing sanctions breaches and managing cross-border risk in virtual asset markets, where transactions can move across jurisdictions in seconds.
While traditionally known for trade surveillance in conventional securities markets, MCO's trade surveillance capabilities support VARA's market conduct and integrity requirements through:
This enables VASPs to demonstrate to VARA that they have robust controls in place to detect and prevent market abuse.
MCO's Know Your Employee (KYE) enables firms to operationalize VARA's conflicts requirements by:
In an industry where conflicts can arise from multiple sources—for example, personal trading activity, outside business activities, and personal relationships—having a centralized system is essential for comprehensive oversight. Read more about how managing employee conflicts of interest is core to effective compliance in the 2025 Wealth Management Outlook.
MCO's Roles and Responsibilities assessment capabilities support governance and accountability by:
This ensures that firms can demonstrate to VARA that they maintain high standards for personnel throughout the employment lifecycle, not just at the point of hire.
Read the White Paper Evidencing Compliance - A Key to Managing Senior Individual Accountability
VARA has established one of the most comprehensive virtual asset regulatory frameworks globally.
Firms that succeed in this environment will be those that embed compliance into their operating model, supported by integrated, technology-driven controls. Manual processes and disconnected systems cannot keep pace with the volume, velocity, and complexity of virtual asset activities while meeting VARA's expectations for robust oversight.
MyComplianceOffice enables VARA-regulated firms to address financial crime risk, market integrity, conflicts of interest, and governance holistically and on a single technology platform—supporting confident, compliant growth in Dubai's digital asset ecosystem.
With an office in Dubai, MCO can help firms across the MENA region effectively manage employee conduct compliance and maintain the highest standards of employee compliance and code of conduct compliance. Want to learn more? Schedule a conversation right here!
More information on conduct risk and compliance considerations in the Middle East:
Why Less is More - Consolidate Compliance Technology to Reduce Cost and Risk
Growth Drives Risk and Compliance Challenges in the UAE and Saudi Arabia