VARA issued the Virtual Assets and Related Activities Regulations 2023 (the Regulations) on 7 February 2023, an all-encompassing virtual asset regulatory framework applicable to all Virtual Asset Service Providers (VASPs) in Dubai but excluding the DIFC. Ever since then, 22 VASPs have got the licenses and the number is still growing rapidly. This achievement is no doubt very encouraging for all prospective VASPs who, however, still find the AML/CFT compliance really challenging, especially for these VASPs that have been operating outside of Dubai but intend to be licensed with VARA.
General Compliance Management: When VASPs conduct business and provide services in the United Arab Emirates (UAE), they should adhere to the Principles and spirit of integrity, diligence, efficiency, robust technology, adequate protection, accurate accounting, effective disclosure, compliance, openness, and transparency.
Compliance Operation: VASPs should operate effectively and in full compliance with applicable regulations to protect their virtual assets and those of their clients from theft, fraud, or misappropriation. Robust preventive measures must be in place to prevent any staff from exploiting confidential information or insider knowledge. VASPs must provide Staff Management and Training on operational policies and procedures to employees within 30 days of onboarding, regularly conduct anti-money laundering and counter-terrorist financing training thereafter, and monitor their adherence to all established procedures.
AML/CTF Operation:
- MLRO
- AML/CTF Policies, Procedures, and Controls
- Customer Due Diligence (CDD) – KYC
- Customer Risk Assessment (CRA) – KYT
- Suspicious Transaction Monitoring and Reporting
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