The UAE's financial regulator, the Securities and Commodities Authority (SCA), announced on Wednesday that it has begun accepting license applications from companies wishing to offer virtual asset services, following its approval of a decision to regulate virtual asset service providers.

At the end of last year, the UAE Cabinet issued Resolution No. 111 of 2022 on Regulating Virtual Assets and Virtual Asset Service Providers, which gives the SCA the power to issue decisions to regulate virtual asset transactions and license virtual asset service providers.

All cryptocurrency companies operating within the UAE are now required to submit a license application to the SCA, with the exception of those operating within the tax-free zone. Companies operating in the Emirate of Dubai are required to submit a license application to VARA and seek SCA approval according to a uniform procedure developed to simplify and speed up the licensing process.

According to the SCA website, the decision to regulate virtual asset platform operators contains nine clauses, the third of which prohibits the trading of virtual assets in the UAE unless authorized by the SCA and/or relevant authorities. Article 4 sets out the functions of the operator, and Article 5 sets out the obligations of the operator, including operational efficiency and flexibility, the development and maintenance of operating rules that meet the determined standards, etc. Article 4 also deals with integrity, transparency and professional conduct; Virtual asset protection systems and measures; Compliance and disciplinary measures, systems and procedures; Rules and procedures for fair, orderly and efficient operation; And regulating areas such as service access by establishing procedures that guarantee access only to authorized people.