Dubai’s Virtual Asset Regulatory Authority (VARA) has banned the issuance of privacy-focused crypto assets such as Zcash (ZEC) and Monero (XMR) in the region, according to new guidelines released on February 7. ing.
“Anonymity-enhanced cryptocurrencies prevent tracking of transactions and ownership records via distributed public ledgers, allowing virtual asset service providers to [VASP] There are no mitigation techniques or mechanisms that allow traceability or ownership identification. “
Cryptocurrency community member Matt Hussey said Dubai’s ban on privacy coins “beats” the friendly regulatory environment for cryptocurrencies.
Before Dubai’s ban, authorities in other countries like Japan took similar steps in 2019. At the time, privacy coins were popular among ransomware groups.
In addition, Huobi has delisted seven privacy coins in 2022 to remain compliant with regulators.
Dubai Introduces VASP Crypto Regulation
Meanwhile, Dubai’s VARA introduced Some regulations to guide the operation of crypto companies in the country.
According to new regulations, crypto companies looking to operate in the region must secure a license before they can begin operations. Officials said any entity in which he invests more than $250 million in cryptocurrencies would also have to register with VARA.
Meanwhile, VARA said individuals who violated the market conduct rules could be fined up to 20 million dirhams ($5.4 million) and institutions could face fines of up to 50 million dirhams ($13.6 million). said to be sexual.
VARA’s supervision and approval fees ranged from 40,000 dirhams ($11,000) to 200,000 dirhams ($55,000).
The new rules apply only to VASPs operating in Dubai. Crypto companies in the free zone of the Dubai International Financial Center (DIFC) will not be affected as they operate under different regulators.
However, the regulator noted that all market participants, including those not licensed by VARA, must comply with marketing, promotion and advertising regulations.
VARA said it intends to promote the emirate as a “regional and international hub” for virtual assets. The regulator added that it wants to raise industry awareness and encourage innovation.