UNITED ARAB EMIRATES Law and Practice Contributed by: Arnold Krutilins and Gabrielle Margerison (nee Lowe), White & Case LLP
The FSRA also sets out guidance in respect of initial coin offerings in its “Guidance – Regulation of Initial Coin/Token Offerings and Crypto Assets under the Financial Services and Markets Regulations” (the “ICO Guidance”). The ICO Guidance sets out the FSRA’s approach to token issuers seeking to raise funds through ICOs, and market intermediaries or opera - tors dealing in, or offering services in, virtual tokens and crypto-assets. The ADGM’s Distributed Ledger Technology Foundations Regulations 2023 adds fur - ther requirements on DLT foundations when they issue tokens. Tokenisation of real-world assets (RWAs) in the UAE is generally feasible but presents practical and legal challenges that are typically addressed through struc - turing and perimeter analysis. Key challenges include: • classification and perimeter (ie, whether the tokenised interests constitute a “security”, “invest - ment token”, “crypto token”, “virtual asset” or other regulated instrument and therefore which regulator has jurisdiction); • enforceability and perfection (ensuring the token maps cleanly onto a legally enforceable proprietary or contractual interest in the underlying asset, including perfection/registration formalities that may still need to be performed off-chain); • custody and control (including whether custody of the token or the underlying asset triggers custody or safeguarding requirements and the need for robust operational controls, segregation and recon - ciliation); • disclosure and market conduct obligations on issu - ance and secondary trading venues; • cross-border constraints (particularly where RWAs or investors are located outside the UAE); and • insolvency and trust/segregation analysis (including treatment of token-holder claims and asset segre - gation on insolvency of issuers/intermediaries). 10.5 Regulation of Blockchain Asset Trading Platforms Trading of virtual assets is regulated under the gen - eral provisions applicable to trading set out by the DFSA, the FSRA, the CMA and the VARA where the blockchain assets fall under the scope of their regu -
latory regimes. For further discussion on trading see 6 Marketplaces, Exchanges and Trading Platforms . 10.6 Staking VASPs licensed by the VARA to provide custody ser - vices may also provide staking if explicitly author - ised to do so by the VARA (and the authorisation is expressly stipulated in their licence). The VARA con - siders staking as forming part of the custody services that a VASP is permitted to provide. The provision of staking as part of custody services is therefore con - sidered to be a subset of the custody services activity. In the DIFC, the DFSA permits the provision of stak - ing services by authorised firms that are authorised to provide custody, subject to certain restrictions includ - ing offering and provision only to professional clients and market counterparties and providing appropriate disclosures with respect to the risks of staking. In the ADGM, in September 2025, the FSRA published Consultation Paper No 10 of 2025 proposing a regu - latory framework for the staking of virtual assets and inviting public feedback. As of February 2026, the FSRA has not yet published final rule amendments implementing the proposed framework, and firms considering staking structures in or from the ADGM should expect FSRA engagement to remain case-by- case pending finalisation. 10.7 Crypto-Related Lending The VARA regulates the provision of lending services relating to cryptocurrencies with “lending and bor - rowing services” being a specific activity requiring a licence from the VARA, with the relevant rules being contained in the VARA’s Lending and Borrowing Ser - vices Rulebook. The Lending and Borrowing Services Rulebook stipulates the relevant policies, procedures and public disclosures that need to be developed and made if a VASP is providing lending services and sets out specific rules relating to client lending concern - ing client reporting and valuation, record-keeping, risk management and due diligence and client agree - ments. In the DIFC, the DFSA prohibits authorised firms from offering or providing any facility or service(s) that allows a client to lend crypto tokens whether to the
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