• Commodity Token - any crypto asset that is not a security token.

• Crypto Asset - a record within an electronic network or distribution database functioning as a medium for exchange, storage of value, unit of account, representation of ownership, economic rights, or right of access to the utility of any kind, when capable of being transferred electronically from one holder to another through the operation of computer software or an algorithm governing its use.

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• Crypto Assets - cryptographically secured digital representations of value or contractual rights that use a form of distributed ledger technology and can be transferred, stored, or traded electronically. 

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• Crypto Asset Custody Services - services to control, safeguard or manage private cryptographic keys associated with crypto assets for or on behalf of any person, and other services where the service provider holds, takes responsibility for or otherwise conducts control, safeguarding, or management of crypto assets for or on behalf of any person, including maintaining portfolios for customers.

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• Crypto Asset Exchange - a platform or facility for the trading, conversion and/or exchange of crypto assets in return for other crypto assets, fiat currency, securities and /or commodities, which applies non-discretionary trading and/or order matching rules, or which brings potential buyers and sellers together. 

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• Crypto Fundraising Platform - an electronic platform accessible online through which a facility is available for persons to commit funds to subscribe for crypto assets.

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• Securities - shares, bonds, financial bills and other financial instruments.

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• Security token -a security to the extent issued, transferred or traded in the form of a crypto asset. Security and derivatives tokens are referred to as investment tokens.

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• Stored Value Facility - a facility in relation to which a customer pays a sum of money (or other means of payment) to the issuer of the facility in exchange for the storage of that money (or equivalent) on the facility and for the use of the facility as a means of payment for goods, services or other, as undertaken by the issuer.

 

• Virtual Assets  - a digital representation of value that can be digitally traded or transferred or used as an exchange or payment tool or for investment purposes. It includes digital tokens (such as digital currencies, utility tokens, or asset-backed tokens) and any other virtual commodities, crypto assets, and other assets of the same nature.

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• Virtual Asset Platform - a centralised or decentralised digital platform on which virtual assets are sold, purchased, traded, offered, issued, and safely kept; and through which the clearing and settlement of traded Virtual Assets are made, using the distributed ledger technology.

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• Virtual Asset Wallet - a digital application, or any other digital or electronic medium, through which the virtual assets owned by the beneficiary are managed and transferred and through which all the transactions on behalf of the beneficiary to transfer virtual assets between accounts are made.

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• Virtual Token - a digital representation of a group of rights that can be issued and traded digitally through a virtual asset platform.

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A company should be incorporated in the UAE to get licenses to operate in the financial and crypto markets.

• DMCC Trading License - required for crypto commodities trading (only for trade using own funds). Doesn't allow to conduct ICO (Initial Coin Offerring) or exchange activities.

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• SCA (Securities and Commodities Authority) License - required for crypto assets exchange activities (i.e., facilitation of trade, conversion, and the exchange of crypto assets).

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• SVF (Stored Value Facilities) License (issued by UAE Central Bank) - for issuing stored value facilities (e.g., e-wallets). An exemption is applied for Single-purpose SVF and some other cases.

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• VARA permit - required for the provision of a) a virtual asset platform operation and management services, b)  services for the exchange between virtual assets and fiat currencies, c) services for the exchange between virtual assets, d) virtual assets transfer services, e) virtual assets safekeeping, management and control services, f) services related to virtual assets wallets, g) services related to offering and trading in virtual tokens in Dubai.

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• MVP (Minimal Viable Product) License (issued by VARA) - ...

Depending on the activities and license type, a company and its technology may need to meet extensive requirements related to the following:

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• Business strategy and plan;

• Business continuity management (business impact analysis, recovery strategies, business continuity plan, IT recovery and alternative sites for business);

• Financial covenants, resources, and safeguarding of customers' interests;

• Business conduct (fair, honest, responsible) and customer/consumer protection;

• Corporate governance (e.g., board structure, code of conduct, performance program);

• Risk management and internal controls (e.g. in governance, float management, technology, payment security, business continuity);

• Anti-money laundering (AML) and countering the financing of terrorism;

• Information and accounting systems (including data protection);

• Management and safe keeping of the float;

• Technology and related risks management (e.g. cyber risk, unauthorised access, fraud risks)

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Central Bank of UAE - regulates, supervises, and issues licensing concerning SVF activities.

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Dubai Multi Commodities Center (DMCC) - 

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Dubai Virtual Assets Regulatory Authority (VARA):

• Regulates, supervises, and oversees the issuance, offering, and disclosure of virtual assets and NFT in Dubai Emirate. 

• Regulates and oversees the operation and management of virtual asset platforms, distributed ledger technology, and virtual asset wallets

• Monitors trading and other transactions in virtual assets to prevent price manipulations, protect beneficiaries and curb suspicious practices.

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Secutiries and Commodity Authority (SCA)

For violation of SVF regulations:

• Administrative, e.g., replacing Board of Directors, Senior Management or restricting their powers, barring individuals from the UAE financial sector

• Financial - fines

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For violations related to data privacy and security:

• Unauthorised disclosure of personal data - fine at least AED 20,000 and/or imprisonment for at least one year.

• Interfering with privacy (e.g., recording personal data without the data owner's consent) -  a jail sentence and a fine.

• Cybercrime related to personal data - temporary detention, and/or a minimum prison sentence from 6 months to 1 year; and/or a fine between AED 150,000 and 1,000,000

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For money-laundering and related activities, any or a few of the following:

For individuals:​

• Imprisonment not exceeding ten years and/or fine between AED 100,000 and AED 5,000,000;

• Temporary imprisonment and a fine between AED 300,000 and AED 10,000,000 if the perpetrator commits any of the following acts:

- abuses influence of power granted to him by his profession or professional activities;​

- the crime is committed through a non-profit organisation;

- the crime is committed through organised crime groups;

- in cases of recidivism.

For legal entities:

• A penalty between AED 500,000 and AED 50,000,000

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For individuals who uses proceeds for terrorist financing:

• Life imprisonment or temporary imprisonment of no less than ten years and penalty between AED 300,000 and AED 10,000,000 for using the proceeds for terrorism financing.

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For anyone who uses proceeds in financing illegal organisations:

• Temporary imprisonment and a penalty of no less than AED 300,000.

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For legal entities who are involved in terrorism financing crime: 

• Dissolution and closure of offices.

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Not informing authorities about suspicious activities related to money laundering and terorism financing due to gross negligence or on purpose: 

• Imprisonment and/or a fine between AED 100,000 and AED 1,000,000.

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For revealing information, notifying or warning anyone about transactions investigated by authorities:

• Imprisonment for not less than six months  and/or a penalty between AED 100,000 and AED 500,000.

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