The Securities and Commodities Authority (SCA) announced the start of receiving applications for licensing companies wishing to provide virtual asset services, following the approval of the Authority's Board of Directors, headed by H.E. Mohamed Ali Al Shorafa, on the decision to regulate virtual asset service providers.

At the end of last year, the Cabinet issued Resolution No. (111) of 2022 regarding the regulation of virtual assets and service providers, which stipulated that for the purposes of implementing the provisions of the Cabinet Decision, the Securities and Commodities Authority shall have the competence to issue decisions regulating virtual asset transactions, licensing its service providers, and their mechanism of work.

Based on the decisions issued by the Authority's Board of Directors today, all companies providing virtual asset services based in the UAE (except for companies licensed in financial free zones) are required to regularize their status and apply for a license from the Securities and Commodities Authority, while all companies operating in the Emirate of Dubai must obtain a license from the Dubai Virtual Assets Regulatory Authority (VARA) in addition to approval from the Securities and Commodities Authority in accordance with standard procedures between The Authority and the Authority ensure the ease and speed of obtaining the license.

The decision to regulate the operator's business of the virtual assets platform included 9 articles, including Article (3), which states that the virtual asset may not be traded in the country until it is accepted in the official list of virtual assets of the virtual asset platform operator licensed by the Authority and/or the competent authority.

Article (4), which defines the tasks of the virtual asset platform operator, and Article (5), which deals with the obligations of the virtual asset platform operator according to 7 axes, including: efficiency and operational flexibility, providing operational rules, including setting and maintaining operational work rules, and meeting the operational rules for a set of standards clarified by the terms of the article, and Article (4) also includes integrity, transparency and professional conduct, the system and procedures for protecting and preserving virtual assets, measures, systems and procedures for discipline and compliance, and rules and procedures for fair and orderly operation It is effective to regulate trading, and to regulate access to services through procedures that ensure access to its services and facilities only to authorized persons, and regulatory arrangements and controls.

According to Article (6) of the Resolution, the Authority may request the provision of any documents or data from the operator of the virtual assets platform, provided that he is committed to providing them within the period specified by the Authority, and the Authority shall also have supervision, investigation, control and inspection of the platform and the operator of the virtual assets platform and everything related to them, with the same powers prescribed on the markets.

According to Article (7) of the Resolution, the concerned parties may appeal against the Authority's decisions issued in implementation of the provisions of this Resolution in accordance with the controls and decisions issued by the Authority in this regard.

The decision included an annex on "Measuring the appropriateness of accepting the virtual asset within the official list of the virtual asset platform operator", which set the criteria that the platform operator is required to adhere to when evaluating and accepting the virtual asset.

Legislative amendments were also made to the Virtual Assets Financial Activities Rulebook , where new financial activities were added: virtual assets broker and custodian For virtual assets, the virtual asset platform operator, a new category has been added (Category VII - Virtual Asset Service Providers), and an annex has been prepared to Part III of the The Financial Activities Rulebook includes the provisions of the virtual asset portfolio in terms of its creation, management and related controls.