UAE Law and Practice Contributed by: Irina Heaver and Zainab Kamran, NeosLegal
firms to detect and prevent manipulative and abusive trading strategies. In the DIFC, market abuse is governed by the DIFC Markets Law 2012 and the DFSA’s Code of Market Conduct, which together prohibit insider dealing, market manipulation and misleading disclosure. The regime is extra-territorial in scope and applies to Investments generally, including crypto tokens admit- ted to trading on DIFC-regulated venues, and updated rules effective January 2026 further refine the frame- work. In practice, market abuse enforcement is con- centrated around conduct affecting DIFC-regulated trading venues and DIFC market users. 2.6 Non-Compliance Enforcement of virtual asset regulations in the UAE has intensified markedly. VARA has emerged as the most active enforcement body, issuing sanctions for a range of violations including unlicensed operations and breaches of the Marketing Regulations. In one of its largest single actions, VARA penalised 19 entities simultaneously, imposing fines alongside cease-and- desist orders. Most recently, in March 2026, VARA issued a public market alert directing several entities operating under a major international exchange brand to immediately cease all virtual asset activity in Dubai, none of the named entities holding a licence under VARA, the FSRA or the DFSA. VARA’s enforcement remit extends expressly to over- seas firms targeting Dubai audiences. Since the Mar- keting Regulations took effect on 1 October 2024, it has been unlawful for any unlicensed entity, including those based abroad, to advertise or promote virtual asset services to Dubai and UAE residents through any channel. VARA has applied this framework to sanc- tion foreign firms, including a Singapore-based pay- ment technology provider and an offshore exchange operator, for unlicensed marketing activity directed at Dubai users. The regulatory posture across the UAE is likely to become more assertive over the next 12 months. VARA’s escalating enforcement cadence, the con- solidation of federal oversight under the CMA, and the UAE’s ongoing FATF compliance commitments together point toward a stricter and more coordinated
approach to cross-jurisdictional activity. Firms operat- ing in or marketing into the UAE without appropriate authorisation can expect continued and heightened scrutiny. 3. Licensing and Set-Up Requirements 3.1 Licensing Requirements The trigger for licensing is the conduct of a regulated virtual asset activity in or from the relevant jurisdiction, rather than mere establishment or incorporation. The UAE operates multiple parallel licensing frameworks. VARA governs virtual asset service providers in Dubai, while the CMA regulates the conduct of capital market activities involving virtual assets on the UAE mainland, with the FSRA and the DFSA operating equivalent regimes within ADGM and the DIFC respectively. The licensing obligation applies on a substance-over- form basis and extends to entities operating from out- side the UAE. Where a firm provides virtual asset ser- vices to UAE or Dubai residents, regardless of where it is incorporated or where its servers are located, it is expected to hold the appropriate licence from the relevant regulator. VARA has taken an active position on this point: its Marketing Regulations, in force since October 2024, prohibit unlicensed entities, including overseas firms, from advertising or promoting virtual asset services to Dubai and UAE residents through any channel. This position was reinforced by VARA’s March 2026 enforcement action against several enti- ties operating under a major international exchange brand, which were ordered to cease all activity in Dubai despite having no physical presence in the emirate (see 2.6 Non-Compliance ). As to grandfathering, when VARA published Rule- book Version 2.0 in May 2025, existing licensees were afforded a 30-day transition period to achieve compliance with the updated requirements, with full compliance required by 19 June 2025. At the federal level, following the enactment of the CMA Decree- Laws in late 2025, entities previously licensed by the SCA have a one-year transitional period expiring on 1 January 2027 within which to align with the new framework. Pre-existing Cabinet decisions and SCA resolutions continue to apply in the interim to the
686 CHAMBERS.COM
Powered by FlippingBook