The Dubai Financial Services Authority ("DFSA") announced today amendments to its Crypto Token framework, signalling a significant step forward in promoting innovation within the fintech sector.
The new framework aims to provide a clearer regulatory environment for businesses operating in the web3 space, ensuring that they are able to innovate and grow while operating within a secure and transparent regulatory environment.
One of the key changes introduced by the DFSA is the introduction of new provisions for those entities conducting marketing activities, as well as making introductions or referrals. These new provisions are designed to provide greater clarity and certainty for businesses conducting ancillary services, especially for those operating in or from the Dubai International Financial Centre, while also ensuring that the DFSA is able to effectively regulate and monitor these entities.
The amendments to the Crypto Token framework also include new guidance on the recognition of crypto tokens, as well as custodial and staking activities, a reduction of the fees required when applying to be recognised as a Recognised Crypto Token (from $10,000 to $5,000), and an increased oversight on compliance matters. As an example of this new compliance provisions, the transfer of Crypto Tokens equal or above $1,000 shall be executed upon the competition of a due diligence that identifies and assess the risks associated with the transfer.
Overall, the amendments to the DFSA's Crypto Token framework represent a positive step forward in promoting innovation within the fintech sector. By providing a clear regulatory environment for businesses operating in the web3 space, the DFSA is also helping to ensure that these entities can thrive and grow while operating within a secure and transparent regulatory framework.
The announcement can be found here: https://www.dfsa.ae/news/dfsa-enhances-its-crypto-token-framework-fostering-innovation.
For more information on the amendments and their impact on virtual assets service providers, third parties operating with virtual assets, and/or third parties providing ancillary services, please do not hesitate to contact us.
Originally published June 3, 2024
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