New VARA Rules: Tighter Regulation of Crypto Exchanges in Dubai
Date: 2025-05-20 Author: Oliver Abernathy Categories: IN WORLD
The Dubai Virtual Assets Regulatory Authority (VARA) has released an updated version of its regulations aimed at strengthening oversight of cryptocurrency brokers and exchanges. The focus is on limits on the use of leverage and collateral, which the regulator believes will help achieve compliance with international risk management standards.
The updates include important regulatory changes in previously under-regulated areas such as broker-dealer activities and the custody of cryptocurrencies. VARA has also revised terminology to eliminate ambiguities in terms such as “client assets,” “qualified custodians,” and “collateral requirements,” thereby ensuring uniformity in regulation.
One of the key aspects of the reforms was tightening the rules on margin trading. VARA has revised leverage thresholds, increased collateral requirements, and established stricter monitoring mechanisms for platforms providing such services. These measures are aimed at reducing systemic risks associated with sharp market fluctuations and potential liquidations.
In addition, the regulator has introduced a separate section on the distribution of tokens. It describes the conditions for obtaining a license, investor protection requirements, and marketing restrictions, especially in the case of offerings aimed at retail market participants.
The regulated spectrum of activities now covers a wider range of activities, including exchange, lending, borrowing, asset management, consulting, custody services, as well as transfer and settlement in virtual assets. VARA emphasizes that these steps are aimed at forming a mature and responsible ecosystem.
Ruben Bombardi, General Counsel of VARA, noted that the purpose of the update is to create a sustainable regulatory environment capable of supporting the scalable growth of the industry. VARA has given companies 30 days — until June 19 — to adapt their processes to the new requirements. During this period, the regulator will actively engage with licensed entities to ensure a smooth transition.
The updates also synchronize risk management and disclosure requirements where activities overlap, such as exchange and custody services. This should simplify the regulatory obligations for virtual asset service providers (VASPs) by reducing the barriers to their operational adaptation.
Dubai is thus taking a confident step towards further strengthening its status as a leading global crypto hub by offering clear and harmonized rules for all market participants.
