UAE Trends and Developments Contributed by: Irina Heaver and Zainab Kamran, NeosLegal
The CMA assumes all rights, obligations and con- tracts of the former SCA as its legal successor. The new framework codifies prospectus liability, estab- lishes an Investor Protection Fund and a Settlement Guarantee Fund, substantially increases penalties for unauthorised activity (with fines of up to AED250 mil- lion and imprisonment of not less than one year under Article 71 of Federal Decree-Law No 33), and asserts explicit extra-territorial reach over any person target- ing clients within the UAE, including from outside the country or from a Financial Free Zone. The CMA has since issued Decision No 4/R.M/2026, introducing an activity-based licensing framework for virtual asset service providers, with industry-friendly capital, gov- ernance and substance requirements that are both reasonable and workable in practice, replacing the prior SCA framework in full. Cabinet Decisions No 111 and 112 of 2022, which del- egate authority to local licensing authorities such as VARA, remain in force. Existing federal licensees and pipeline applicants are working through a 12-month transition period to migrate to the new regime, and the relationship between the CMA, VARA and the CBUAE remains an area requiring close monitoring. VARA , the world ’ s first virtual assets regulator Traditional financial regulators, often cautious and lacking specialised knowledge of virtual assets, struggled to create effective rules, prompting Dubai to establish a dedicated authority for the virtual assets ecosystem. VARA’s launch in 2022 marked a remark- able global first. Since then, VARA has continued to expand its licensee base, granting in total 71 authorisations as of 1 May 2026. Licensed entities now include not only the major exchanges originally associated with the regime, such as Binance, Crypto.com, Deribit and BitGo, but also a growing cohort of RWA tokenisation platforms and institutional custodians. VARA’s regulatory framework encompasses every aspect of industry activities, including exchange activ- ities, broker-dealer services, custody, lending and bor- rowing, transfer and settlement, and advisory servic- es. Through a rigorous two-stage licensing process, beginning with the Initial Disclosure Questionnaire and
progressing to a full VASP licence, VARA ensures that only qualified and compliant entities operate in Dubai. For well-prepared applicants, the full process typically takes between six and ten months. ADGM ’ s DLT Foundation framework for DAOs The UAE has established a legal framework for Decentralised Autonomous Organisations (DAOs) through ADGM’s DLT Foundations Regulations 2023, a purpose-built statutory regime for blockchain foun- dations and DAOs. The framework allows founders to create foundations that represent DAOs in the real world, hold assets, enter into contracts, issue utility tokens, and engage in other activities requiring legal personhood, all under direct application of English common law. The structure addresses the key challenges DAOs face globally, including personal liability, asset ownership, contractual capacity and recognition of decentralised decision-making. Foundations may be established as ownerless legal entities with no mandatory physical presence, and standard registration takes approxi- mately one month for well-prepared applicants. The regime has attracted leading global protocols. The IOTA Ecosystem DLT Foundation became the first registered DLT Foundation in November 2023, seeded with over USD100 million in IOTA tokens. It was fol- lowed by the Stacks Asia DLT Foundation, a Bitcoin layer-2 foundation, the TON DLT Foundation, and the Avalanche DLT Foundation, which incorporated in late 2025 to anchor Avalanche’s MENA ecosystem opera- tions. ADGM has also signed strategic partnerships with the Solana Foundation and other major protocols, signalling continued growth in the registered founda- tion pipeline. Digital assets and Web3 dispute resolution ADGM, one of the most progressive jurisdictions in terms of recognition of the digital assets industry with- in the UAE, stands at the forefront of blockchain and Web3 dispute resolution, offering global businesses an “opt-in jurisdiction” option, namely, the ability to select ADGM as their legal jurisdiction without any physical or business connection. ADGM applies English common law directly, providing international blockchain and digital assets businesses with legal
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