Dubai’s Virtual Assets Regulatory Authority (VARA) has given licensed crypto firms until June 19, 2025, to comply with its updated Rulebooks, marking a significant step in tightening oversight of the emirate’s fast-growing digital asset sector. The Dubai virtual asset regulator introduced Version 2.0 of its regulations on May 19, refining risk management protocols, standardizing key definitions, and imposing stricter controls on high-risk activities like margin trading and token distribution.
With these changes, the Dubai virtual asset regulator aims to enhance market integrity, reduce ambiguities, and align local standards with global best practices.
Dubai virtual asset regulator’s updated rulebooks: What’s changing?
The Dubai regulator has harmonized compliance requirements across seven key virtual asset activities:
-
Advisory services
-
Broker-dealer operations
-
Custody solutions
-
Exchange services
-
Lending and borrowing
-
VA management and investment
-
VA transfer and settlement
A VARA spokesperson told Cointelegraph:
“The aim was to reduce ambiguity and help Virtual Asset Service Providers (VASPs) navigate cross-functional compliance more easily. We’ve aligned risk management and disclosure obligations, especially where activities overlap.”
Key updates include:
-
Clearer definitions for terms like “client assets,” “qualified custodians,” and “collateral requirements.”
-
Stricter leverage limits for margin trading to prevent excessive risk-taking.
-
New licensing rules for token distribution, including marketing restrictions for retail investors.
The Dubai virtual asset regulator emphasized that these changes reflect lessons learned from past market disruptions, ensuring stronger safeguards for investors.
Stricter margin trading rules to curb excessive risk
One of the most notable updates targets margin trading, a high-risk practice that amplifies both profits and losses. The Dubai virtual asset regulator has imposed:
-
Lower leverage thresholds to reduce liquidation risks.
-
Tighter collateral standards to ensure sufficient backing for trades.
-
Enhanced monitoring requirements for platforms offering leveraged positions.
“Margin trading can lead to cascading liquidations during volatility,” the VARA spokesperson explained. “By tightening leverage, we’re reducing systemic risks while still allowing responsible trading.”
This move follows incidents in global crypto markets where over-leveraged positions triggered mass liquidations, exacerbating price crashes.
New safeguards for token sales and retail investors
The Dubai regulator has also introduced a dedicated section for token distribution, addressing concerns over fraudulent or misleading crypto offerings. Key measures include:
-
Mandatory licensing for firms conducting token sales.
-
Stricter marketing rules, particularly for retail investors.
-
Enhanced disclosure requirements to prevent misleading claims.
“It’s about aligning with global conduct expectations and closing observed regulatory gaps,” the VARA spokesperson said. “Retail investors need transparency to make informed decisions.”
This comes as global regulators, including the SEC and FCA, crack down on unregistered token sales and misleading promotions.
Industry reaction: Compliance challenges and opportunities
While some firms welcome the clarity, others face operational hurdles in meeting the June 19 deadline.
Ahmed Ismail, CEO of a Dubai-based crypto exchange, commented:
“The new rules bring much-needed structure, but the timeline is tight. Smaller players may struggle with implementation costs.”
Conversely, Rashid Al Ghurair, a blockchain compliance specialist, praised the Dubai regulator’s approach:
“VARA is setting a benchmark for crypto regulation. These updates will boost investor confidence and attract more institutional players.”
What’s next for Dubai’s crypto ecosystem?
The Dubai virtual asset regulator plans further engagement with licensed firms during the 30-day transition period. Additional updates may follow as VARA monitors market developments.
With these changes, Dubai reinforces its position as a leading crypto hub, balancing innovation with robust oversight. As the June 19 deadline approaches, all eyes will be on how VASPs adapt to the Dubai virtual asset regulator’s evolving framework.
Key takeaways:
-
June 19, 2025: Deadline for full compliance with VARA’s updated Rulebooks.
-
Margin trading: Stricter leverage and collateral rules to prevent excessive risk.
-
Token sales: New licensing and marketing restrictions to protect retail investors.
-
Global alignment: Dubai’s rules mirror tightening regulations worldwide.
The Dubai virtual asset regulator continues to refine its approach, ensuring the emirate remains at the forefront of secure and sustainable crypto growth.
