Dubai’s crypto regulator has given licensed digital asset companies until June 19 to comply with its updated activity-based Rulebooks to enhance market integrity and risk oversight.
On May 19, Dubai’s Virtual Assets Regulatory Authority (VARA) announced that it had released Version 2.0 of the Rulebooks.
The regulator said it had strengthened controls around margin trading and token distribution services, harmonised compliance requirements across all licensed activities and given clearer definitions for collateral wallet arrangements.
VARA’s team will engage with licensed entities and expects the companies to comply with the updated rules after a 30-day transition period.
“In line with global regulatory best practices, a 30-day transition period has been granted to all impacted virtual asset service providers [VASPs], with full compliance required by 19 June 2025,” VARA wrote.
VARA enhances supervisory mechanisms
VARA highlighted that it had enhanced supervisory mechanisms across several regulated activities. This includes advisory, broker-dealer, custody, exchange, lending and borrowing, virtual asset (VA) management and investment, and VA transfer and settlement services.
A VARA spokesperson told Cointelegraph that the updates will bring consistency across all activity-based rules defining core operational terms. The spokesperson gave examples of terms like “client assets,” “qualified custodians,” and “collateral requirements” as some of the terms more consistently defined in the update.
The update also aligned risk management and disclosure obligations, where activities overlap, in areas like brokerage, custody and exchange.
“The aim was to reduce ambiguity and help VASPs navigate cross-functional compliance more easily,” VARA told Cointelegraph.
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Dubai regulator tightens leverage thresholds for margin trading
As for margin trading, the VARA spokesperson said they tightened leverage thresholds, mandated clearer collateralisation standards, and enhanced the monitoring obligations for VASPs offering this feature.
Margin trading allows traders to control large positions with smaller amounts of capital. It amplifies both gains and losses. Tightening the leverage traders use helps limit the risks of widespread liquidations in a market downturn.
The crypto regulator introduced a new section on token distribution that sets out licensing prerequisites, investor protections and marketing restrictions. The spokesperson emphasized the marketing restrictions, especially for “retail-facing offers.”
“It’s about aligning with global conduct expectations and closing observed regulatory gaps,” the VARA spokesperson said.
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