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The Dubai Financial Services Authority (DFSA) amended its crypto token regime based on recommendations from a January consultation paper, it said in a statement yesterday. The amendments offer more flexible regulations for investing in unrecognized crypto tokens, reduce fees on investments, and implement more stringent anti-money laundering rules.
Breakdown of the key amendments:
- Reduced fees: The application fee for a crypto token to be recognized by the DFSA is now USD 5k, down from the previous USD 10k, according to appendix 5 (pdf).
- Money laundering rules: Crypto businesses will have to implement stringent anti-money laundering policies for token transactions by closely monitoring transactions, reporting suspicious activities, and conducting due diligence on transfers exceeding USD 1k to ensure regulatory compliance and assess associated risks, according to appendix 4 (pdf).
- External and foreign funds based in now have more freedom to invest in recognized tokens, while domestic qualified investor funds can invest up to 30% of their gross asset value in unrecognized tokens, according to appendix 1 (pdf). The recognized tokens are Bitcoin, Ether, Litecoin, XRP, and Toncoin.
- The regulation of fiat crypto tokens: The fresh regulations for fiat-backed Crypto Tokens — also known as stablecoins — demand reserves matching or exceeding the token’s total value, in the same fiat currency, composed of stable, liquid, diversified, and low-risk assets. These reserves must undergo daily valuation, with monthly reports confirming compliance, all verified by an independent, qualified third party.
ALSO- The Central Bank of the UAE’s board greenlit the introduction of a licensing and regulatory system for stable cryptocurrencies, along with a series of measures geared towards supporting the banking, ins. and financial infrastructure sectors, Wam reported, without disclosing further details.
