- The Virtual Assets Regulatory Authority (VARA) in Dubai has recently released a document that disallows operations with privacy coins such as Monero and Zcash.
- The new regulations include authorization requirements such as anti-money laundering, marketing protocols, prevention of insider trading, and observing if the asset class is used for criminal activities.
- The aim of these regulations is to provide maximum security for local consumers and establish Dubai as a global center of blockchain technology.
Dubai Forbids Operations With Monero, Zcash, and Other Privacy Coins
The Virtual Assets Regulatory Authority (VARA) in Dubai has recently released a document that prohibits all activities involving privacy coins such as Monero (XMR) and Zcash (ZEC). The new regulations also enforce certain rules on the domestic cryptocurrency sector to turn the city into an “international hub for virtual assets.”
New Policy Requirements
As per the newly released document, operations with anonymity-enhancing digital assets like XMR and ZEC are now forbidden in the financial heart of United Arab Emirates – Dubai. The local watchdog set authorization requirements that crypto firms need to pass before popping up in the region. These include anti-money laundering obligations, marketing protocols, prevention of insider trading, and observing whether the asset class is used in criminal activities. Angela Ang – Senior Policy Advisor at blockchain intelligence firm TRM Labs – commented: “Any obfuscation of fund flows poses a challenge to detecting illicit activities, so it is unsurprising that regulators react strongly to these kinds of asset classes and mechanisms.”
Goals Of The Regulations
The updated regime aims to provide maximum security for local consumers and establish Dubai as a global center of blockchain technology. The regulator previously gave provisional licenses to Binance and other leading crypto exchanges which operate within its borders. It also opened its marketplaces for Initial Coin Offerings (ICOs), Security Token Offerings (STOs), digital asset custodianship services providers, digital wallet operators etc.
Opinions On The Matter
Angela Ang commented: “Regulators will always prioritize investor protection over innovation or convenience; this announcement shows that VARA takes this responsibility seriously.” Meanwhile, another industry player said: “To ensure trust among stakeholders while fostering growth in the region’s virtual assets sector requires strong regulation from agencies like VARA.”