The Securities and Commodities Authority (SCA) has stated that the United Arab Emirates (UAE) is moving closer to providing a regulatory and supervisory framework that will control the country’s virtual asset business.
Recommendations of the FATF
The Securities and Commodities Authority (SCA), a UAE securities regulator, has stated that it is close to “releasing the regulatory and supervisory framework connected to virtual assets produced for productive investments.”
Furthermore, the regulator stated in a statement that it consulted “concerned authorities” throughout the establishment of the regulatory framework that handles the risks of money laundering and terrorism financing associated with “virtual assets and virtual asset service providers.” The statement continues, “Such consultations have been ended.”
Meanwhile, the regulator stated that the framework was created to ensure that the country’s crypto industry follows the recommendations of the Financial Action Task Force (FATF). As a result, regulated exchanges are able to “apply for a license for virtual assets exchange subject to the Authority’s approval and compliance with all of the Authority’s regulations and procedures.”
Nominees from the two financial free zones, the Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC), are exempt from this rule (DIFC).
Maintaining Anti-Money Laundering Controls
Meanwhile, the statement clarifies that anyone who wants to start a virtual asset service provider (VASP) company must first get approval from the SCA. Furthermore, VASPs with commercial licences who provide any virtual asset services must “apply to the Authority to obtain the necessary licence to practise such activity,” according to the SCA.
These individuals must also “affirm” their commitment to comply with all anti-money laundering rules, according to the statement.
While the SCA welcomes all entities’ cooperation and involvement, it warned that any violation of the aforementioned regulatory and supervisory framework will result in the authority seeking proper and supervisory measures.
Also Read: JPMorgan: Global Regulation for Banks to help Clients Invest in Cryptocurrencies is Urgently Needed
VASPs (Virtual Asset Service Providers) are “designated people” for the purposes of the CJA 2010 to 2021, and they must follow the Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) provisions in Part 4 of the CJA 2010 to 2021.
VASPs are companies that offer any of the following virtual asset services:
- Virtual assets and fiat currency are exchanged;
- Trade of virtual assets in one or more types;
- To undertake a transaction on behalf of another person that moves a virtual asset from one virtual asset address or account to another is to transfer virtual assets.
- Provider of a custodial wallet; and
- Participation in and provision of financial services in connection with an issuer’s offer or sale of a virtual asset, or both.
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