Cryptocurrency Business License in UAE

The Crypto Currency business is rising in popularity globally as many investors are looking at diversified options to grow their wealth. The new digital currency is expected to grow into the mainstream of business operations in the coming years.

Crypto License in UAE is becoming mainstream with more Free Zones allowing companies to indulge in Crypto trading, Crypto Asset handling, bitcoin trading, and related activities.

The Dubai Multi-Commodities Center, Dubai Airport Free Zone and the Sharjah Research Technology Innovation Park are offering crypto license for companies to trade and manage their crypto assets in UAE.

In Dubai, CryptoCurrency is becoming more popular and there is a huge opportunity to explore the lines of Crypto Currency trading, storage, transactions, and a host of new business possibilities. All types of CryptoCurrencies (Bitcoin, Etherum, Dogecoin, Ripple, Tether, etc.) are available for trading in the online Crypto Exchanges in Dubai.

To operate a business in the field of CryptoCurrency in UAE, the investor must obtain a Crypto Currency License in Dubai, UAE.

Cryptocurrency License in DMCC, Dubai

In Dubai, to open a Cryptocurrency related business establishment, the investor has to register a company in the Dubai Multi Commodities Center (DMCC) and obtain a Cryptocurrency License to operate the stipulated business activities.

With the Cryptocurrency License from DMCC, an investor can offer customers cryptocurrency-related services (storage, management, trading, Bitcoin solutions, software applications, advisory, services, etc.)

Cryptocurrency license in UAE is currently governed by stringent regulations from the UAE Government as well as the Central Bank. In the long run, it is expected to be a mainstream business category.

Cryptocurrency License in DAFZA, Dubai

Dubai Airport Free Zone Authority (DAFZA) has signed an agreement with the Securities and Commodities Authority (SCA) to support the crypto assets trading and related business activities within the Free Zone.

As per the new agreement, the companies are allowed to trade with crypto assets, cryptocurrencies, and related business activities.

DAFZA is integrating the Crypto-Currency License issuance along with its other value-added service for global investors. Also, there is a regulatory framework and flexible legislative support from DAFZA for the smooth functioning of the business activity.

The issuance of the crypto trading license in DAFZA is aimed at driving the growth of bitcoin trading and the overall cryptocurrency sector in the region.

Laws Governing CryptoCurrency Business in UAE

Regulations for cryptocurrency in UAE are governed by the FSRA (Financial Services Regulatory Authority) at ADGM (Abu Dhabi Global market). It publishes guidance on the usage of cryptocurrencies in business and criteria for acquiring a Cryptocurrency License in the UAE.

The Authority also monitors the blockchain, Bitcoin, and cryptocurrency businesses in the region to ensure money laundering and other illegal activities using the new mode of payment.

The regulations of Crypto Asset Activities in ADGM by FSRA is the only extensive guide on cryptocurrencies in UAE currently. There are few criteria the business has to fulfil to secure the crypto license in UAE

Crypto License from DAFZA is governed by the Securities and Commodities Authority (SCA). It will oversee the offering, issuance, trading of Crypto assets and licensing related financial activities in DAFZA.

Criteria to Secure a CryptoCurrency License in UAE

In UAE, depending on the market capitalization, traceability price volatility, etc., the Crypto Currencies are allowed for the trading subject to certain regulations.

For the crypto companies to secure the crypto license:

• There must be enough capital to operate the business for at least 6 months successfully.
• A strict KYC Norm has to be adhered
• Disclosure to Value-Added-tax, Anti-Money laundering, and other Government authorities on request must be fulfilled
• Secured information of client’s financial information – safeguarding against cybersecurity

In Dubai, only the authorized Free Zones are eligible to issue the Crypto Currency Licenses to investors.

The DMCC Free Zone and Government of Dubai Authority on commodities, trade, and enterprise have joined together with the Securities and Commodities Authority (SCA) to establish a regulatory framework for businesses offering Crypto asset-related services in UAE.

Followed by the DMCC Free Zone, it is the Dubai Airport Free Zone and the Sharjah Research Technology & Innovation Park joined the list of Free Zones offering a Cryptocurrency License in UAE.

CryptoCurrency License in UAE Free Zones

Companies or investors intending to offer crypto-assets and related services in UAE must incorporate an onshore company in the authorized Free Zone complying with the Free Zone regulations and business setup process.

As an additional step, the investor or company must receive a pre-approval from the UAE’s Securities and Commodities Authority (SCA).

The investors must demonstrate strict compliance to the Anti-Money Laundering and Counter-Terrorism Financing Laws of UAE.

Also, a level of Cyber Security and Data Protection has to be administered by the organization. ISO 9001:2015 Certification and ISO 27001:2013 Certification Standards help in achieving the desired level of compliance and cybersecurity.

There need to be strict IT policies on managing customer information and cryptocurrency details in local servers and cloud services as part of disaster recovery and backup options in case of any vulnerability detected in the system.

Also, a robust Service Level Agreement (LSA) must be signed with contracting company’s and employees who perform maintenance, and operations on the systems to protect data from sharing.

Types of Buyers for Crypto Currency Services

Crypto Currency and its support services are in a very nascent and developing stage. Hence, the customer base for the new technology as a whole is evolving as time passes by.

Currently, the Crypto Assets can be owned by two audience groups:

• Who met the eligibility of a Qualified Investor?
• Who does not meet the criteria?

Qualified Investor

Institutional Investor (Banks, Companies) who hold more than AED 75m in assets or have a turnover above AED 150m, or state Government or international bodies.

Individuals holding AED 4m in funds or annual income no less than AED 1m who are aware of Cryptocurrency in detail and the risks associated with it.

In a nutshell, Crypto Currency is expected to be the next big thing and the acceptance of digital currencies is already at peak levels.

Hence there are immense growth opportunities that investors can tap into by venturing into the Crypto Currency business.

To know more about CryptoCurrency License in UAE, talk to our team right away!