Dubai’s virtual asset regulatory authority opens the door to regulated crypto staking services

Dubai’s virtual asset regulatory authority opens the door to regulated crypto staking services

Dubai’s virtual asset regulatory authority VARA opens the door to regulated crypto staking services with its  revised Custody Services Rulebook, allowing staking by virtual asset custody Service providers. 

As per the revised rule book, virtual asset service providers who carry out custody services can offer staking services as well withouth obtaining a separate licence for VA Management and Investment Services. Additional licensing and supervision fees will be payable in connection with the provision of this additional service.

As per the amendments,  VASPs Licensed by VARA to carry out Custody Services may only provide Staking from Custody Services, if explicitly authorised to do so by VARA, and such authorisation is expressly stipulated in their Licence.

There will be incremental fees for custody services.

VASPs who are authorized to offer staking services, will have to comply to all the rules related to custody services while they are offering their staking services as staking services is a subset of crypto or virtual asset custodial services. VASPs can only offer staking services to the clients they are providing custody services to. As per VARA,  “  For the avoidance of doubt, VASPs Licensed by VARA to carry out Custody Services that are also authorised to provide Staking from Custody Services, may only provide Staking from Custody Services for Virtual Assets for which they are providing Custody Services.”

As for client protection VASPs can only act on the explicit instructions received from their clients.

The first VASP to have both a custodial and staking license was Komainu which recently received its full license from VARA.

Japanese Nomura owned crypto custodian, Komainu first to receive full VASP license by VARA in UAE

Japanese Nomura owned crypto custodian, Komainu first to receive full VASP license by VARA in UAE

Komainu, a regulated digital asset custody provider created by Japanese investment bank Nomura, digital asset manager CoinShares and digital asset security company Ledger. has been granted a full virtual assets service provider license by Dubai’s virtual asset regulatory authority in UAE. The license was issued on August 18th 2023.

Prior to that Komainu had received in July 2022 the MVP license from VARA.

Komainu will be able to serve qualified retail and institutional clients both as a crypto asset custodian and offer custodial staking services. 

“We see tremendous opportunities to scale our business here amid a significant boom in assets driven by fund formation and exchange launches,” said Sebastian Widmann, Komainu’s Head of Strategy. “Dubai has a vibrant digital asset ecosystem and impressive talent pool, and we are proud to contribute to the growth of this innovative financial hub. Our presence and desirable regulatory status in the region marks another differentiator for us as we execute the next phase of our business.”  

Prior to this VARA had issued the first VASP license to Laser Digital Middle East FZE, the crypto arm of Japanese Nomura Holdings. Laser Digital now has a full crypto license that will allow it to offer virtual asset broker dealer and investment management services in the UAE.

Nomura owned crypto entities now have two full licenses in Dubai UAE, while others such as BitOasis has lost their active MVP operational license and are in the midst of being acquired by other players.

The UAE has been attracting crypto entities over the past two years, and is poised to be one of the leading regulated crypto hubs in the world. 

Updated August 22nd 2023

OPNX token exchange fails to pay fines of over $2 million to Dubai’s virtual asset regulator

OPNX token exchange fails to pay fines of over $2 million to Dubai’s virtual asset regulator

Further to Virtual Assets Regulatory Authority’s (VARA) previous notices dated 12 April 2023 and 27 April 2023 regarding the conduct of Open Technology Markets Ltd. known as OPNX and opnx.com, VARA has issued the following fines against OPNX including a $2,722,548 equivalent to AED 10,000,000 against OPNX for a Market Offence under Regulation VIII.A.3 of the Virtual Assets and Related Activities Regulations 2023 (Regulations)

As per VARA, this fine was issued on 2 May 2023 and remains unpaid at the time of publication of this notice. 

The VARA notice includes  $54,000 equivalent to AED 200,000 against each of the following 4 persons: OPNX founders Kyle Davies, Su Zhu and Mark Lamb and OPNX CEO Leslie Lamb.

The fines are for violations of Administrative Order No. 01/22 Relating to Regulation of Marketing, Advertising and Promotions Related to Virtual Assets, The fines were issued on 2 May 2023 and have been fully paid by the individuals in question.

All fines noted above were referred to VARA’s Grievance Committee [the Committee formed in accordance with Article 22 of Law No. (4) of 2022 Regulating Virtual Assets in the Emirate of Dubai] in accordance with due governance requirements. The Committee reviewed the referral of the grievance and determined that the enforcement actions taken be upheld in their entirety.

To date, the AED 10MM fine issued against Open Technology Markets Ltd remains unpaid, and VARA shall determine consequential actions warranted against OPNX, which may include further fines, penalties, and/or taking any actions necessary to recover payment in addition to possibly referring the matter to any law enforcement agency(ies) or competent courts.

Burency restarts its operations amidst tumultuous conditions

Burency restarts its operations amidst tumultuous conditions

Burency a UAE Blockchain development firm with crypto asset exchange operating out of offices in DWTC ( Dubai World Trade Center) in Dubai UAE, is restarting its operations after what it calls bad and out of control conditions. This restart is happening amidst a tumultuous conditions spurred by comments made from its previous managing Director.

So while Burency was announcing on twitter that they will be coming back soon stating, “ We are coming soon.. after bad and out of control conditions, we are back to work with great strength and passion. The Burency project is ongoing and will return better than before.”

On August 9th they stated, “ We are currently working on restarting the Burency Exchange and will notify you as soon as possible about the operating date. Full support will be provided to the project at all levels, including marketing, companies, and plans to develop the workflow and the project as a whole.”

However these comments come in parallel to a tweet by Qusai M Alsharef, former Managing Director of Burency. He writes, “Regrettably, I am writing to announce my resignation from my position “Managing Director” at Burency, effective from 2nd August 2023.” He explains the reasons stating, “The continuous violation for the accepted funding plan, coupled with unfulfilled Discussions, words and agreements to the work stakeholders came to really critical stage.  It is deeply disappointing to have encountered such unprofessional conduct, including deceptive promises and consistent violation of our established agreements. At the end, I truly wish for Burency to have an honest recovery to right and to see a responsible actions of eliminating all these highly critical issues starting from fulfilling the past.”

Historically Burency had also made announcements that were not fully backed up with real actions. In April 2020, Burency announced  that it had launched the first secured & insured crypto-currency exchange platform in Dubai, UAE which was later refuted by Nebbex.

The company while having a tech license in UAE, its crypto business is regulated in Estonia. It had stated it was seeking to be registered in the UAE but to this day has not.

In 2020 crypto advocate, John McAfee,  announced that he had joined the advisory board of Burency, but no further announcements or information was shared on this.

So it might seem that Burency wants to come out of the volcanoe stronger than ever, but its past seems to be haunting it to  present day.

DIFC Innovation Hub launches subsidized licenses for Web3, AI, and DLT technology companies

DIFC Innovation Hub launches subsidized licenses for Web3, AI, and DLT technology companies

The Dubai AI and Web 3.0 Campus, situated in Dubai International Financia Centre, announced that it will be issuing artificial intelligence (AI) and Web3 licenses supporting activities ranging from Distributed Ledger Technology Services (DLT), specialised Artificial Intelligence Research & consultancies, IT infrastructure builders, Technology Research and Development and Public Networking Services.

Licenses will be issued by Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region, which is currently home to an established ecosystem of tech enablers and start-ups at the DIFC Innovation Hub.

The Dubai AI and Web 3.0 Campus is a dedicated campus for AI and Web3 innovation and will provide state-of-the-art physical and digital infrastructure within the DIFC Innovation One new premises, including R&D facilities, accelerator programmes and collaborative workspaces, to attract, build and scale firms in the region. 

The campus was launched earlier this year and is supported by Dubai’s industry-leading regulatory regime aligned with the emirate’s vision of becoming a global leader in AI and Web3. This initiative is designed to bring in $300 million in funds and create more than 3,000 jobs in the next five years.

The campus will also increase accessibility and participation in Web3 development, backed by a collection of underlying technologies such as blockchain, AI, internet of things and the metaverse. Virtual assets owned in Web3 decentralised infrastructures represented about 40 per cent of the virtual-asset global economy in 2021, according to a report by BCG, and the transaction value of virtual assets is said to range between USD150 billion and USD300 billion by 2025. 

Mohammad Alblooshi, Chief Executive Officer of the DIFC Innovation Hub, said: “We are thrilled to announce that we are now granting innovative AI and Web3 companies licenses out of DIFC. The campus will foster a world-class nurturing environment that enables business growth and development. We are confident that by granting these licenses, we will attract more global talent and investment to the region and create a culture of collaboration and innovation. This is a notable milestone for the Dubai AI and Web3 Campus and will strengthen Dubai’s position as the business destination of choice for technology-focused companies and attract more world class talent and diversified investors to the region.”

UAE Venture Capital firm raises $50 million to invest in Blockchain Web3 startups

UAE Venture Capital firm raises $50 million to invest in Blockchain Web3 startups

UAE based Illuminati Capital has raised $50 million to invest in early-stage blockchain startups including game companies.

According to the news, the Dubai based firm and its partners have individually invested in blockchain startups worth over $1 billion.

Illuminati Capital aims to offer more than just financial support. The venture capital firm is dedicated to building the global Web3 ecosystem and driving transformative shifts in decentralized technologies.

The team behind Illuminati Capital has collectively deployed $30 million, resulting in exits worth $150 million.

Vickaash Agrawal partner at Illiminati Capital stated in an article in Venture Beats, “We are witnessing a remarkable growth trajectory in Web3 venture investing.  With a track record of 120-plus successful blockchain investments in my investment portfolio, I will bring my expertise in data, infrastructure, regulation and mining.”

Illuminati Capital’s investment focus spans multiple verticals, including decentralized finance (DeFi), blockchain gaming, artificial intelligence, NFT infrastructure, and real-world assets (RWA). By strategically investing in pioneering sectors, Illuminati Capital aims to play a pivotal role in shaping the decentralized economy of the future.

“The possibilities of decentralized technology are endless,” said Dhaval Parikh, a partner at Illuminati Capital and blockchain investor with five-plus years of experience and a portfolio of leading Web3 high-end projects, in a statement. “With a background in VC, I will focus on due diligence, risk assessment, portfolio management, and deal flow while analyzing industry trends and key ecosystem insights.”

Dubai’s Department of Economy teams up with VARA to integrate virtual asset service offering to UAE market

Dubai’s Department of Economy teams up with VARA to integrate virtual asset service offering to UAE market

The Dubai Department of Economy and Tourism and the Virtual Assets regulatory Authority have signed an MOU to unify VASP ( virtual asset service provider) offering in the city.

The two entities will collaborate to offer a synchronised VA market assurance across the Emirate of Dubai – spanning [Public/Marketplace] Customer Care + Complaints; [Business] On-Site Inspection + Enforcement; [Business] VASP Registration + Licensing; [G2G + G2B + G2C] Education-Training-Knowledge Sharing.

As per the MOU, both parties agree to pool their complementary capabilities to lay robust foundations that will aid Dubai’s GDP contribution to the expanding global New Economy portfolio, reinforcing the city’s reputation as an attractive, innovative, and secure global hub for Virtual Asset Service Providers (VASPs), operators, and customers.

The MoU’s scope further strengthens VARA’s commitment to achieving full transparency and market conduct adherence across VASPs licensed to operate in Dubai, so that the reputation and credibility of the UAE as the preferred hub for the global sector are automatically established.

VASPs will benefit from seamless workflow processes between both parties with DET adding VARA activities to its system for virtual assets licence issuance. DET will undertake robust inspections and support VARA with in-situ enforcements including deploying penalties such as suspensions or revocations in cases of proven negligence or non-compliance with VARA rules, in addition to Business as Usual application renewals for VASPs that meet VARA’s requirements in full. VARA will be included on DET’s E-Permit system, which will enable one-touch point approvals on VA events and both parties will actively collaborate on awareness campaigns for VARA product and licensing updates, as well as data sharing protocols and legacy onboarding.

In keeping with Dubai Government’s commitment to improving business and market service delivery, this partnership between VARA and DET will also seek to leverage the Dubai Corporation for Consumers Protections & Fair Trade (DCCPFT) department at DET by upgrading it with specialist VA know-how from VARA, thereby optimising government resources and provide a transparent, seamless customer experience.

Both parties will also collaborate on marketing campaigns designed to raise general awareness towards consumer protection and developments in the virtual assets sector including communicating consumer protection information and advice. DET, in co-ordination with VARA, will also publish relevant notices and warnings, including penalty notices and consumer protection advisories, on its website and the DCCPFT website.

Bankrupt FTX crypto exchange requests to remove FTX Dubai from Chapter 11 proceedings

Bankrupt FTX crypto exchange requests to remove FTX Dubai from Chapter 11 proceedings

FTX in the USA, sent a motion dismissing Chapter 11 case for its Dubai’s operation regulated under Dubai’s virtual asset regulatory authority (VARA) in UAE. 

FTX VARA holds $4 million as security for the license of the total of $.45 million held by FTX Dubai in several accounts. As per Cointelegraph article, on July 25, VARA confirmed to FTX Dubai management that such restricted cash would be released in the context of the liquidation of FTX Dubai, according to United Arab Emirates law:

As stated in the motion, FTX Dubai established on February 11, 2022 under the laws of the United Arab Emirates to operate a crypto exchange. FTX Dubai is a direct, wholly-owned subsidiary of Debtor FTX Europe AG. Then on July 12, 2022, FTX Dubai was granted a virtual asset service provider license (the “License”) from Dubai’s Virtual Assets Regulatory Authority (“VARA”). Notwithstanding the grant of the License, FTX Dubai did not offer any crypto-related services to investors in the United Arab Emirates or operate a crypto exchange prior to the Petition Date. On November 10, 2022, VARA suspended the License and, on July 12, 2023, the License expired.”

FTX claims that given the absence of any historical business or resources to commence any business in the future, FTX Dubai has no reasonable likelihood of rehabilitating its operations. Additionally, FTX Dubai is balance sheet solvent. Therefore, the Debtors believe that a solvent voluntary liquidation procedure in accordance with the laws of the United Arab Emirates would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets. To the extent that any creditors filed claims against FTX Dubai in the Chapter 11 Cases, the dismissal of the Chapter 11 Case of FTX Dubai will not impact such claims and will not prejudice any creditor’s ability to pursue such claims directly against FTX Dubai in its local liquidation proceeding.

FTX adds, “  Accordingly, the Debtors believe it is in the best interests of the Debtors and their stakeholders to dismiss the Chapter 11 Case of FTX Dubai at this time.

Swiss crypto service provider Laser Digital awarded full crypto license by Dubai’s virtual asset regulator

Swiss crypto service provider Laser Digital awarded full crypto license by Dubai’s virtual asset regulator

Dubai’s virtual asset regulatory authority, VARA has granted Laser Digital Middle East FZE, the crypto arm of Japanese Nomura Holdings, a full crypto license that will allow it to offer virtual asset broker dealer and investment management services in the UAE.

Laser Digital announced that  Laser plans to launch over-the-counter trading services and digital-asset investment products for institutional investors in coming months.

According to VARA website, Laser Digital has been awarded This is the full VARA licence, issued to VASPs which satisfies all of the requirements as specified under the Virtual Assets and Related Activities Regulations 2023. It allows a VASP to offer approved Virtual Asset services to retail customers as well as institutional customers and Qualified Investors.

Laser Digital, which is headquartered in Switzerland with officers in Dubai and London, said in a statement it had received the licence from Dubai’s Virtual Asset Regulatory Authority, allowing it to offer crypto-related broker-dealer, management and investment services.

“VARA’s thorough and consultative process provides institutional investors with the assurance they require to engage in this asset class. With the license now in place, we are looking forward to Laser’s growth over the coming years” said Jez Mohideen,  Co-Head of Global Markets EMEA. Laser Digital

Founded last year by Nomura, Laser Digital was the brainchild of Steven Ashley, the former head of Nomura’s wholesale division, and Jez Mohideen, Nomura’s former Chief Digital Officer.

Dubai’s WOW Blockchain Summit launches $1 million startup competition at its UAE October 2023 event

Dubai’s WOW Blockchain Summit launches $1 million startup competition at its UAE October 2023 event

WOW Summit has announced the launched of its WEB3 Summit Dubai, widely hailed as the WOW SUMMIT Dubai to be held on October 8th and 9th 2023. 

Following its successful events in Lisbon and Hong Kong, WOW Summit Dubai 2023 emerges to unite distinguished industry titans, esteemed government officials, visionary funds, enterprising venture capitalists, boundary-pushing NFT and digital artists, trailblazing entrepreneurs, and influential multinational corporations.  The event will unfold at the  Atlantis the Royal, The Palm—a sanctuary of innovation where dreams transform into reality.

The Summit aims to drive the innovative trajectory of Web3, covering cutting-edge trends and innovations in technology. Through carefully selected programs, attendees will explore topics including the Web2 – Web3 transition, CBDC, regulations, asset tokenization, and the social impact and applications of blockchain and DLT technologies for real-life applications. 

Blockchain visionaries and digital assets leaders, alongside respectful UAE government officials will grace the conference stage, including Eowyn Chen, CEO, Trust Wallet; Joy John, Director, Cloud Native and Innovation, EMEA, Oracle; Talal Tabbaa, CEO CoinMena; Prof. Hoda Alkhzaimi, Director for EMARATSEC & Co-chair of the WEF Global Future Council; Ben Caselin, MaskEx SVP & CSO; Scott Tiel, TOKO Founder & CEO of TOKO by DLA Piper; Sam Katiela, Founder & CEO of Mamemo and Chairman of Crypto Valley Partners.

The summit will cover a wide range of topics and activities, providing valuable insights into the main NFT use cases, the latest updates on DEFi, DAOs, and dApps, digital asset management companies, global digital assists regulations, and more. Additionally, startup competitions will be held, offering valuable prizes to the winners and a chance to win up to USD 1,000,000 with the MMPro Expert program.

Ivan V. Ivanov, global CEO of WOW Summit, said: “Our mission is to organize an exclusive event unlike any other in the landscape of blockchain, web3, and crypto events. Our vision is to create an unparalleled experience, setting us apart from others in the region. We are fully committed to delivering top-notch content, showcasing world-renowned speakers, and forging strategic partnerships that define the cutting edge. To ensure the utmost value for our attendees, we meticulously verify all participants, guaranteeing the finest networking opportunities and the best event experience possible.”

 Join us now as we redefine the boundaries of what is possible and chart a course towards unprecedented success.