- A spokesperson of Vara mentioned that the updates will draw consistency over all activity-based regulations, elaborating core operational terms.
- VARA mentioned that the focus was to suppress ambiguity and help VASPs navigate cross-functional compliance swiftly.
The crypto regulator of Dubai has given a deadline of June 19 to various digital assets companies to comply with its updated activity-based rulebooks to boost market integrity as well as risk oversight.
Dubai’s Virtual Assets Regulatory Authority (VARA) publicized on May 19 that it had launched Version 2.0 of the Rulebooks. The regulator also mentioned that it had intensified controls around margin trading and token distribution services.
Also, it has harmonized compliance needs over all license activities and given a clearer definition for collateral wallet arrangements. The team of VARA speculates that the companies will comply with the updated rules after a 30-day transition period.
The regulator further mentioned that in accordance with global regulatory best practices, the 30-day transition period has been provided to all virtual asset service providers to complete their full compliance by 19 June 2025.
Risk Management Played A Crucial Role
VARA outlined the enhanced supervisory mechanism over various regulated activities by them. The mechanism includes advisory, broker-dealer, custody, exchange, lending and borrowing, Virtual Asset Management and investment, and also VA transfer and settlement services.
A spokesperson of Vara mentioned that the updates will draw consistency over all activity-based regulations, elaborating core operational terms. He also used examples of terms like client assets, qualified custodians, and collateral requirements, and said that these are some terms which has been more consistently used in the update.
The update also lined up with risk management and disclosure obligations. VARA mentioned that the focus was to suppress ambiguity and help VASPs navigate cross-functional compliance swiftly.
Talking about margin trading, the spokesperson mentioned that they strengthened the leverage threshold, required clearer collateralisation standards, and intensified the monitoring obligations for VASPs providing this feature.
Margin trading permits traders to have major positions with a small amount of funds, and it boosts both gains and losses. Also, strengthening the leverage traders use aids in restricting the risk of widespread liquidations in a market downturn.
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