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13 February 20233 minute read

DLA Piper advises Dubai's Virtual Assets Regulatory Authority on world's first virtual assets specific regulatory framework

DLA Piper has worked with the Dubai Virtual Assets Regulatory Authority (VARA), as its exclusive global legal advisor, on the creation of the Emirate’s virtual asset specific regulatory framework. Published on 7 February 2023, the Virtual Assets and Related Activities Regulations 2023 aim to further VARA’s objectives of fostering a vibrant virtual assets ecosystem, promoting innovation, and driving economic growth in the Emirate of Dubai whilst ensuring responsible market participation and consumer protection.

In the formulation of these regulations, VARA saw a global team of DLA Piper lawyers from Dubai, Hong Kong, London and Washington, DC leverage their regulatory expertise and sector knowledge of both virtual assets and financial services regulations. The resulting framework takes an activity-based and technology-agnostic approach to set baseline compliance rules for all operators in the virtual assets sector, with incremental requirements added depending on activity. The regulations apply to all virtual assets, thereby removing some of the complexities persisting in other jurisdictions. This progressive approach is enabled by VARA’s unique mandate as the world’s first independent regulator for virtual assets.

The project benefitted from the capabilities of TOKO, the wholly owned asset tokenisation engine that forms part of DLA Piper’s Law& offering. The firm was able to leverage the platform’s unique combination of legal and technological capabilities to support VARA beyond legal and regulatory advice, also supporting on technical elements of blockchain and asset creation with a team led by Founder and Entrepreneur-in-Residence, Scott Thiel.

DLA Piper’s leading FinTech Partner Kristi Swartz, who led on the projects, comments: “We are delighted to have supported VARA throughout this unique and groundbreaking project. Whilst challenging, it has without question been one of the most exciting of my career to date. Our work has included benchmarking approaches to virtual assets regulation across 20+ countries to identify the best practices which will help VARA deliver on its objectives and establish Dubai as a leader in the virtual assets sector”.

Paul Allen, Partner and Global Co-Chair of Intellectual Property and Technology at DLA Piper, comments: “In what has been a complex and truly international effort from a cross-practice DLA Piper team, we’re excited to have advised VARA in reaching this milestone. Against the backdrop of everything we have seen in the last year, proportionate regulation is the key to unlocking the truly exciting potential of these new technologies, and VARA is leading the way in what those regulations will look like”.

Deepa Raja Carbon, Managing Director and Vice Chairperson of the Executive Board of VARA, added “VARA has been focused on creating the first custom Virtual Asset regime that is progressive, responsive and responsible at its core. The global team of legal and regulatory experts that DLA Piper was able to dedicate to this effort, has made them reliable partners throughout this journey. We look forward to being able to establish regulatory standards that offer cross-border interoperability, so that the global business community is able to accelerate maturity across this game-changing industry.”

Alongside Kristi Swartz, the core members of the DLA Piper team involved throughout the project include Sophie Lessar (Partner, London), Margo Tank (Partner, Washington, DC), Deborah Meshulam (Partner, Washington, DC), Marc Horwitz (Partner, Chicago), Deanna Reitman (Of Counsel, Houston), Amar Fahmy (Consultant, Dubai) and Winson Lau (Associate, Hong Kong).