• Dubai has issued new regulations prohibiting the use of privacy coins such as Monero and ZCash.
• The Virtual Assets Regulatory Authority (VARA) has been given full power to make decisions related to crypto-assets.
• Companies that do not follow the new rulebook may be fined with a range between AED 8m ($2.2m) and AED 50m ($13.6m).
Dubai Takes Stand Against Privacy Coins
Dubai’s virtual asset authority recently published a document called ‘The Virtual Assets and Related Activities Regulations 2023’ which outlined a regulatory framework governing virtual assets and all related activities in the nation, including the general and specific supervision and enforcement powers of VARA. This set of regulations prohibits the use of privacy coins such as Monero (XMR) and ZCash (ZEC), as well as any activities related to these coins.
Regulatory Framework Established
The document sets out licensing and authorization requirements for VASPs (Virtual Asset Service Providers) and issuers that want to operate in Dubai, pertaining to anti-money laundering, marketing regulations, market offenses such as insider trading, etc. Additionally, VARA has been given full power to make decisions related to crypto-assets where it sees fit by issuing public notices either generally or specifically..
Penalties for Non-Compliance
Companies that do not abide by the new rulebook may be fined per violation depending on the offense with: between AED 8m ($2.2m) and AED 50m ($13.6m); disgorgement of the profits gained or losses avoided; 5%-15% annual revenue for a VASP; 200%-300% of profits gained or losses avoided (if greater than above values).
Defining Anonymity Enhanced Cryptocurrencies
Anonymity-Enhanced Cryptocurrencies are defined in this set of regulations as “a type of Virtual Asset which prevents tracing of transactions or record of ownership through distributed public ledgers”. Furthermore, any VA Activity related to them is also prohibited in Dubai unless mitigating technologies or mechanisms are put in place by VASPs allow traceability or identification of ownership.
Conclusion
Thus, Dubai’s newly established regulatory framework aims to promote safe practices within its cryptocurrency sector while also protecting investors from potential threats posed by anonymity enhanced cryptocurrencies such as Monero (XMR) and ZCash (ZEC). Any company found non-compliant with these regulations will face hefty fines according to an array specified by VARA