Dubai’s VARA issued a circular requiring VASPs to follow AML/CTF.
Dubai Virtual Assets Regulatory Authority (VARA) issued a circular urging that VASPs comply with FATF’s amended high-risk countries’ AML criteria.
VARA required that Virtual Asset Service Providers (VASPs) follow all mandatory rulebooks, including the Compliance and Risk Management Rulebook.
According to the release, VARA’s mission is to ensure market stability, which depends on participants’ financial strength and responsible market behavior. These guidelines put the sector on level with top worldwide standards.
VASPs must prioritize complete compliance with all National Anti-Money Laundering and Combating Financing of Terrorism and Illegal Organizations Committee regulatory duties. Also, they must regularly check and examine the Financial Action Task Force (FATF) and Committee lists and information, as revised and current.
VARA mentioned High-Risk Countries & Countermeasures. High-risk countries have major strategic inadequacies in their money laundering, terrorist funding, and proliferation financing regimes, according to the FATF.
For high-risk nations, the FATF recommends all members and governments to increase due diligence. The most severe incidents require governments to take countermeasures to safeguard the international financial system from high-risk country ML/TF/PF hazards. These nations are on the “FATF blacklist.”
All financial institutions, designated national financial behavior providers, virtual asset service providers, and non-profit organizations are required to take extra precautions when doing business with individuals or organizations from countries included in the Black List.
In order to safeguard the UAE’s financial and non-financial sectors from the risks associated with money laundering, terrorist financing, and proliferation financing, the relevant supervisory authorities in the UAE are required to remind all financial institutions, domestic non-banking financial institutions, and virtual asset service providers of the need to comply with specific financial sanction requirements outlined in relevant UN Security Council Resolutions and CABINET DECISION NO. (74) of 2020.
If FIs, DNFBPs, and Virtual Asset Service Providers fail to execute this judgment, all UAE supervisory agencies must sue them, including their directors and senior management.
In October 2024, the Virtual Assets Regulatory Authority (VARA) issued cease-and-desist orders and fines to seven entities for operating without a license and violating marketing regulations to strengthen public safety.
VARA advises against working with unregistered businesses in its enforcement warning on its website. Engaging with such organizations puts people and institutions at financial and reputational risk.
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