The Securities and Commodities Authority (SCA) stated that it has come closer to issuing the regulatory and supervisory framework related to virtual assets issued for investment purposes.
In a statement issued today, SCA said that it has also completed its consultation with the concerned authorities in the country in developing the necessary regulatory framework to address the risks of money laundering and terrorist financing related to virtual assets and virtual asset service providers in the United Arab Emirates, to ensure that the virtual assets sector adheres to the recommendations and requirements of the Financial Action Task Force (FATF).
The Securities and Commodities Authority noted that it is the sole authority in the UAE mainland – except the financial free zones, ADGM and DIFC- for licencing, supervising and overseeing the virtual assets activities and services issued for investment purposes (not virtual assets issued for payment purposes) as well as monitoring the compliance of the licencees by the Authority with the recommendations and requirements of FATF and in accordance with Federal Decree No. 20 of 2018 on Anti-Money Laundering and Countering the Financing of Terrorism and Illegal Organisations and its amendments and implementing regulations.
Exchanges licensed by the Authority and local competent authorities in the mainland can apply for a license for virtual assets exchange subject to the approval and complying to all regulations and procedures of the Authority, it said.
On the other hand, the Authority notified that any person wishing to conduct a virtual assets services provider business in the mainland must obtain an initial approval from the Authority, in accordance with the Regulations Manual of the Financial Activities (the licencing rulebook), before obtaining a commercial license from the competent authority.
The Authority also notified the virtual asset service providers who have commercial licenses and they are providing any virtual asset services, to apply to the Authority to obtain the necessary license to practice such activity and also to confirm their obligation to comply with all legislation related to anti-money laundering controls in the country regarding virtual assets.
The Securities and Commodities Authority said that it looks forward to the cooperation and participation of all entities and concerned parties in establishing the protective compliance in accordance with the legislation, aiming to enable innovation through progressive regulations based on principles of due diligence and agility; using protocols to effectively reduce financial fraud and criminal activity by powerful real-time tracking; ensuring compliance with FATF directives on combating money laundering and terrorist financing; encouraging risk mitigation through awareness and training, disclosure, management, and governance; conducting proportionate and deterrent supervision; and ensuring compliance with FATF requirements by participants.
SCA has confirmed that breach of the aforementioned regulatory and supervisory framework shall be subject to appropriate legal and supervisory actions.
Source: Emirates News Agency