Quick Summary
- VARA launches Version 2.0 of its Rulebooks to ensure consistency across all activity-based regulations.
- 30-day transition period ends on June 19, 2025 — VASPs expected to fully comply.
- Updates emphasize risk management, margin trading rules, and clearer compliance frameworks.
- VARA aims to reduce ambiguity and streamline cross-functional compliance.
- Stronger controls introduced for token distribution and collateral wallet arrangements.
Dubai’s Crypto Regulator Steps Up Oversight
Dubai’s Virtual Assets Regulatory Authority (VARA) announced the release of Version 2.0 of its Rulebooks on May 19, 2025. With an aim to tighten its grip on the growing virtual asset sector, the regulatory body has introduced key updates to improve market integrity, compliance standards, and risk oversight.
The new framework affects a wide range of virtual asset service providers (VASPs), including those involved in brokerage, custody, exchanges, lending and borrowing, investment, and settlement services.
A VARA spokesperson emphasized, “The updates will draw consistency over all activity-based regulations, elaborating core operational terms like client assets, qualified custodians, and collateral requirements.”
Compliance Deadline: June 19, 2025
To align with global regulatory practices, VARA has set a 30-day transition period, urging all VASPs to fully comply by June 19, 2025. The regulatory body believes the timeline provides enough flexibility for businesses to adapt while upholding market discipline.
Tighter Controls on Margin Trading
One of the standout updates targets margin trading, a high-risk practice allowing traders to leverage large positions with minimal capital. VARA has:
- Strengthened leverage thresholds
- Mandated clearer collateralization standards
- Increased monitoring obligations for VASPs offering margin trading
“We’ve intensified obligations to restrict risks of widespread liquidations during market downturns,” the VARA spokesperson stated.
Clearer Definitions and Unified Standards
The updated rulebooks bring harmonized compliance needs across all licensed activities, offering clarity on terms such as collateral wallet arrangements and refining expectations around risk disclosures.
According to VARA, “The focus is to suppress ambiguity and help VASPs navigate cross-functional compliance swiftly.”
Final Thoughts
With the crypto market evolving rapidly, Dubai’s regulatory stance through VARA signals a move towards a more stable and transparent ecosystem. The Version 2.0 update isn’t just a policy shift — it’s a necessary step for ensuring the long-term sustainability of the digital asset space.