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Lawyer explains new federal virtual asset law in the United Arab Emirates

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Lawyer explains new federal virtual asset law in the United Arab Emirates

The United Arab Emirates (UAE) Cabinet has decided to pass a new law that governs virtual assets, setting up the country’s initial regulatory regime for the cryptocurrency space at the federal level. 

Before the federal-level regulation, the UAE already introduced several supervisory initiatives for digital assets in financial free zones like the Abu Dhabi Global Market (ADGM). Last year, Dubai also established its own crypto regulator called the Virtual Asset Regulatory Authority.

Irina Heaver, a UAE-based crypto and blockchain lawyer, explained that the move has several implications in the space. According to Heaver, the new law makes sure that entities that engage in crypto activities must secure a license and approval from the new regulator. Non-compliance could lead to a hefty fine. She explained:

“Failure to comply leads to heavy sanctions, such as a fine of up to 10 million AED ($2.7 million), disgorgement of profits and even criminal investigation by the public prosecutor.” 

Heaver highlighted that the law is expected to come into force on Jan. 14, and would require crypto entrepreneurs operating in the country to conform. “Every crypto and Web3 project operating in the UAE will have to structure a way to comply with the new federal law and all of the existing laws,” she explained. 

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Meanwhile, despite the minimum requirements for VASPs being attainable, the lawyer thinks that many firms may have some difficulties. “Those are actually rather realistic. However, the practice shows that most crypto companies fall short of even basic requirements,” said Heaver.

Related: How does the FTX collapse affect Dubai’s crypto ecosystem?

The crypto lawyer also highlighted that the law has also set up minimum requirements for virtual asset service providers (VASPs). According to Heaver, all VASPs are required to comply with the legislation in force on combating money laundering crimes, the financing of terrorism and the financing of unlawful organizations. In addition, all legal entities that fall into the VASP category will have three months to adapt and comply with the new law. 

Regulated activities under the new law. Source: Irina Heaver

Despite the establishment of a new law dedicated to protecting consumers, Heaver believes that it would be difficult to prevent FTX-like entities from attempting to commit fraud. Despite its efforts, Dubai’s VARA still previously gave FTX approvals before revoking it in November. She noted: 

“From the evidence that emerged, FTX is a case of serious fraud of a level that will look Madoff look like an angel. Unfortunately, no levels of laws can protect us from people wanting to commit crimes intentionally.”

Overall, the lawyer believes that this new development is good for founders, investors and consumers within the UAE and that regulatory clarity gives the country the right ingredients to be the “Web3 capital of the world.” 


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Crypto News

BitPay Announces Partnership With MoonPay – Bitcoin Magazine

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Bitcoin And Artificial Intelligence Frees Your Time - Bitcoin Magazine


BitPay and MoonPay, leading bitcoin and cryptocurrency payments infrastructure providers, have partnered “to provide BitPay users with significantly increased ways to buy cryptocurrency instantly, and at great rates.”

“BitPay’s unique marketplace experience also presents multiple rates for buyers, ensuring they receive the best possible price for their cryptocurrency purchases,” the press release states. “Additional benefits of the integration include fast delivery to any owned wallet address, as well as the ability for buyers to pay with their preferred method, including credit card, debit card, Apple Pay, Google Pay or a variety of local bank transfer methods.”


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Why Real Regulatory Change In Crypto Has Not Happened

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Why Real Regulatory Change In Crypto Has Not Happened



Legislators need to educate themselves on Web3 if they care about protecting consumers, Steven Eisenhauer, chief risk and compliance officer at Ramp, writes.


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South Korea to deploy cryptocurrency tracking system in 2023

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South Korea to deploy cryptocurrency tracking system in 2023


The Ministry of Justice in South Korea announced plans to introduce a crypto-tracking system to counter money laundering initiatives and recover funds linked to criminal activities.

The “Virtual Currency Tracking System” will be used to monitor transaction history, extract information related to transactions and check the source of funds before and after remittance, according to local media outlet khgames.

While the system is slated to be deployed in the first half of 2023, the South Korean ministry shared plans to develop an independent tracking and analysis system in the second half of the year. A rough translation of the ministry’s statement reads:

“In response to the sophistication of crime, we will improve the forensic infrastructure (infrastructure). We will build a criminal justice system that meets international standards (global standards).”

The South Korean police previously established an agreement with five local crypto exchanges to cooperate in criminal investigations and ultimately create a safe trading environment for crypto investors.

Related: South Korean prosecutors request arrest warrant for Bithumb owner: Report

The South Korean Supreme Court ruled that crypto exchange Bithumb must pay damages to investors over a 1.5-hour service outage on Nov. 12, 2017.

The finalized ruling from the supreme court ordered damages ranging from as little as $6 to around $6,400 be paid to the 132 investors involved.

“The burden or the cost of technological failures should be shouldered by the service operator, not [the] service users who pay commission for the service,” the court stated.


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