Key Points from the Dubai Financial Services Authority (DFSA) Crypto Regime Changes Announcement:
Dubai Financial Services Authority has applied some changes on Crypto regime recently, aiming at providing better experience in the cryptocurrency sector.
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Enhanced Financial Resources:
- Facilitate offers from external and foreign funds investing in approved cryptocurrencies.
- Enable qualified local investor funds to invest in non-approved cryptocurrencies.
- Provide custody and pooling services for cryptocurrencies.
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Robust Anti-Money Laundering (AML) Framework:
- Implement the “Travel Rule” for enhanced transaction tracking.
- Strengthen transaction monitoring and blockchain analytics.
- Mandate Customer Due Diligence (CDD) and Know Your Beneficiary (KYB) requirements for crypto.
- Establish licensing fees for cryptocurrencies.
Objectives:
- Foster innovation in the cryptocurrency sector while maintaining regulatory oversight.
- Enhance the regulatory environment for cryptocurrencies in the DIFC.
- Protect investors from financial crime risks associated with cryptocurrencies.
Approach:
- Consulted with over 100 firms seeking licensing from DFSA.
- Considered market developments and international recommendations.
- Leveraged the DFSA’s supervisory expertise.
Expected Impact:
- Attract more cryptocurrency companies to the DIFC.
- Strengthen Dubai’s position as a global hub for fintech innovation.
- Promote a safe and secure environment for cryptocurrency transactions.
Timeline:
- The changes were announced on June 3, 2024.
- The amendments will come into effect later this year.
Ongoing Engagement:
- Dubai Financial Services Authority aims to maintain an ongoing dialogue with stakeholders regarding the crypto regime.
For the second year in a row, the UAE won a prestigious award at the annual World Summit on the Information Society Awards (WSIS 24) organized by the International Telecommunication Union (ITU) for the “Cyber Pulse for Youth” initiative, amid the participation of projects and… pic.twitter.com/ET8LWO7ddZ
— UAE Voice (@uae_voiceeng) June 3, 2024
Additional Notes:
- Dubai Financial Services Authority crypto regime is designed to be technology-neutral, allowing firms to provide a wide range of financial services using cryptocurrencies.
- DFSA has a strong track record of regulating financial services in the DIFC.
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