May 22, 2024
Dubai's VARA Plans Relief for Small Crypto Entities
Policy & Regulation

Dubai’s VARA Plans Relief for Small Crypto Entities

Dubai’s Virtual Asset Regulatory Authority (VARA) is exploring ways to ease the regulatory burden on smaller crypto businesses.

VARA CEO Matthew White shared insights on the authority’s approach during a panel discussion at Paris Blockchain Week, acknowledging that crypto regulations are not perfect and are seeking improvements.

Reducing Financial Burdens for Small Crypto Entities

White emphasized that getting regulated can be a costly process, especially for smaller crypto entities that may lack the necessary resources.

He mentioned VARA’s consideration of plans to lessen financial burdens for these smaller businesses, noting the authority’s experience in facing challenges related to regulatory costs.

VARA CEO Matthew White discussing regulations at the Paris Blockchain Week stage. Source: Paris Blockchain Week

Potential Solutions for Cost Management

One potential solution discussed by White involves larger participants “hosting” smaller crypto entities, allowing the costs of compliance to be carried by those with more resources.

This structure would enable smaller players to join the ecosystem and be regulated without facing excessive compliance costs. “The cost of compliance is borne by the larger systemic players,” said White, explaining the approach.

White underscored VARA’s ongoing efforts to engage with the industry and gain a better understanding of the rapidly changing crypto landscape.

He emphasized the importance of continuing this engagement to allow innovation while creating regulations. “It moves so quickly. We don’t pretend to know everything as a regulator,” he added.

Leadership Changes at VARA

Matthew White assumed the role of VARA CEO last year, succeeding former CEO Henson Orser.

VARA announced the leadership change on November 16 as part of its preparations to ramp up to full-scale market operations.

The United Arab Emirates also tightened its rules and imposed fines for unlicensed virtual asset service providers.

On November 8, regulators in the United Arab Emirates issued joint guidance for Virtual Asset Service Providers (VASPs), detailing fines and sanctions for non-compliance.

VARA’s efforts to regulate the crypto industry and support smaller businesses are part of its mission to create a fair and sustainable regulatory environment in the rapidly evolving world of digital assets.

Image: Wallpaper Flare

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