The Dubai-focused Virtual Assets Regulatory Authority (VARA) has created a new regulatory framework specific to virtual assets, in collaboration with law firm DLA Piper.
VARA, the independent regulator for virtual assets, has published the regulatory framework in an effort to enhance the virtual assets ecosystem, promote innovation in the sector and, ultimately, drive economic growth in Dubai. The ‘Virtual Assets and Related Activities Regulations 2023‘ also look to further ensure responsible market participation and consumer protection.
The new regulations take an activity-based and ‘technology-agnostic’ approach to set baseline compliance rules for all operators in the virtual assets sector. The regulations apply to all virtual assets in an effort to remove the complexities that exist in other jurisdictions.
DLA Piper supported the creation of the new regulations with a global team of lawyers. Lawyers from Dubai, Hong Kong, London and Washington used their regulatory expertise and sector knowledge of both virtual assets and financial services regulations.
DLA Piper also used the digital asset creation engine, TOKO, to support the Virtual Assets Regulatory Authority. The engine provides a platform for creating new markets and uses distributed ledger technology to provide market information and offer transparency. TOKO’s unique capabilities largely supported VARA with technical elements of blockchain as well as asset creation.
‘Regulatory standards that offer cross-border interoperability’
Deepa Raja Carbon, managing director and vice chairperson of the executive board of VARA, added “VARA has been focused on creating the first custom virtual asset regime that is progressive, responsive and responsible at its core.
“The global team of legal and regulatory experts that DLA Piper was able to dedicate to this effort, has made them reliable partners throughout this journey. We look forward to being able to establish regulatory standards that offer cross-border interoperability so that the global business community is able to accelerate maturity across this game-changing industry.”
Kristi Swartz, fintech partner for DLA piper, led the projects. Swartz discussed the collaboration. She said: “We are delighted to have supported VARA throughout this unique and groundbreaking project. Our work has included benchmarking approaches to virtual assets regulation across over 20 countries to identify the best practices which will help VARA deliver on its objectives and establish Dubai as a leader in the virtual assets sector”.
Paul Allen, partner and global co-chair of intellectual property and technology at DLA Piper, also commented. Allen said: “In what has been a complex and truly international effort from a cross-practice DLA Piper team, we’re excited to have advised VARA in reaching this milestone.
“Against the backdrop of everything we have seen in the last year, proportionate regulation is the key to unlocking the truly exciting potential of these new technologies, and VARA is leading the way in what those regulations will look like.”