Opinion of: Irina Heaver, Crypto Lawyer.
The founders who deal with regulatory structuring as a central element of their marketing strategy are those who prosper in water. Unfortunately, many founders consider licenses as a reflection afterwards.
The water is not a place where you can cut the corners. It is however a place where the founders reflected and well prepared are rewarded by speed, clarity and access to a very favorable ecosystem.
Unlike the beliefs of certain founders, regulators are not the problem – confusion, poor planning and lack of preparation are.
The crypto license landscape to the United Arab Emirates can be difficult to grasp, so much so that even venture capital, standard entrepreneurs and worldwide law firms badly contempt for the regime.
Let us bring a certain clarity to the situation.
A country, two legal systems
Water is a federal country comprising seven Emirates, operating in two distinct legal systems.
The legal system of the continent, known as the “onshore” regime, covers the entire territory of water and includes more than 45 free economic zones. These jurisdictions are part of civilian water law and are governed by the water’s judicial system.
The Financial Free, ABU Dhabi Global Market (ADGM) and Dubai International Center (DIFC) areas operate independently under the English Common. They also maintain their own regulatory organizations and judicial systems, separated from the continent’s judicial system.
Understanding this bifurcation is crucial because the regulatory authority governing your cryptographic activities depends mainly on the legal framework in which you choose to operate.
A country, five cryptographic regulators
Five separate authorities regulate crypto and related activities, each with its own jurisdiction, mandate and license.
On the continental side, the three relevant regulators are:
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The Central Water Bank (CBUAE): regulates activities involving stablescoins called by the AED, payments and sending of cryptographic funds, and approves foreign stables.
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The Securities and Commodities Authority (SCA): regulates the exchanges of crypto, brokers and tokens offers that resemble titles or raw material contracts.
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The Dubai virtual asset regulatory authority (VARA): regulates most virtual asset service providers (VASP) operating in Dubai, excluding those of the DIFC.
In relation: Dubai Regulator Greenlights Rusd Stablecoin of Ripple
In the financial areas, there are two separate regulators:
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The Financial Services Regulatory Authority (FSRA): The Financial Watchdog for ADGM, which developed one of the most advanced regulatory executives for digital assets in 2018.
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The Dubai Financial Services Authority (DFSA): the DIFC regulator, with a prudent but evolving approach to cryptographic assets.
This unique framework can be both a blessing and a challenge. Choosing the bad regulator or not understanding the scope of each authority can lead to lost time, missed opportunities or, in some cases, a complete failure of licenses.
Choose the right regulator
The good jurisdiction depends entirely on your specific commercial model. Here are some common scenarios:
Launch an crypto exchange
Do you plan to become the next binance? Be ready to sail on a rigorous license path. Vara, SCA or ADGM are potential houses for you. Everyone has their own requirements, and none is for the timid.
Stable
If you are thinking of competing with Tether in Aed, then welcome to the adult table. You will be dealing at the Central Water Bank.
Build a Rwa Tokenized platform
Do you want to transform luxury real estate, fine arts or a blockchain-based asset whiskey warehouse? Vara’s newly introduced diet for assets supported is an essential reading. And no, slap the “utility token” on white paper will not cut it here.
Start a crypto fund
Do you have capital to deploy and a vision to support the next cryptographic unicorn? It’s time to become the best friends of the FSRA in ADGM. It is one of the most advanced digital active frames, but do not go wrong, they expect real compliance chops.
Launch a payment application
Are you looking to make big money movements? The central bank will watch you closely. Do not expect a light approach when managing customer funds.
Try to do everything
Don’t do it. The founders often want to build the whole offer at once, which can be a recipe for professional exhaustion. It is better to start narrow – obtain a license, create a traction, then on a scale.
More best practices
The founders who prioritize regulatory structuring as a central element of their marketing strategy are those who succeed in water.
Success requires in -depth regulatory assessment from the start, the alignment of a business model with good jurisdiction and authority and collaboration with legal experts who really understand the local landscape.
To the water, the cutting of the corners is not tolerated. The founders who plan carefully and proactively engage with regulators are rewarded by speed, clarity and access to a very favorable ecosystem.
Opinion of: Irina Heaver, Crypto Lawyer.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
