Dubai’s VARA has boosted oversight across multiple virtual asset activities, standardizing key terms and aligning risk management rules to reduce ambiguity and ease compliance for VASPs.
Dubai’s crypto regulator has set a deadline of June 19 for licensed digital asset companies to comply with its updated activity-based rulebooks, aimed at enhancing market integrity and strengthening risk oversight.
On May 19, the Virtual Assets Regulatory Authority (VARA) announced the release of version 2.0 of its rulebooks. The update includes enhanced controls for margin trading and token distribution services. It harmonizes compliance requirements across all licensed activities and provides clearer definitions for collateral wallet arrangements.
VARA will engage directly with licensed entities and expects full adherence to the updated rules following a 30-day transition period.
In line with global regulatory best practices, a 30-day transition period has been granted to all impacted virtual asset service providers [VASPs], with full compliance required by 19 June 2025,” VARA stated.
VARA expands oversight across crypto activities
VARA has strengthened its supervisory framework across several regulated activities, including advisory, broker-dealer, custody, exchange, lending and borrowing, virtual asset (VA) management and investment, and VA transfer and settlement services.
A VARA spokesperson told Cointelegraph that these updates are intended to create consistency across all activity-based rules, particularly in the definition of core operational terms such as “client assets, “qualified custodians,” and “collateral requirements.”
Risk management and disclosure obligations have also been aligned across overlapping activities, such as brokerage, custody, and exchange, aiming to reduce ambiguity and streamline cross-functional compliance for VASPs.
“The aim was to reduce ambiguity and help VASPs navigate cross-functional compliance more easily,” VARA explained.
VARA cracks down on collateral rules
Regarding margin trading, VARA has tightened leverage thresholds, imposed stricter collateralisation standards, and bolstered monitoring requirements for VASPs offering this feature.
Margin trading allows traders to amplify gains and losses by controlling large positions with relatively small capital. Tightening leverage helps mitigate the risk of mass liquidations during market downturns.
VARA also introduced a new section on token distribution, outlining licensing prerequisites, investor protections, and marketing restrictions. A particular emphasis was placed on marketing limitations for retail-facing offers. It’s about aligning with global conduct expectations and closing observed regulatory gaps, the VARA spokesperson added.