VARA’s Regulatory Insights: Navigating Compliance Costs for Crypto Firms

During a recent session on the Global Regulatory Landscape Panel at the Paris Blockchain Week, Mathew White, CEO of Dubai’s VARA (Virtual Asset Regulatory Authority), shared insights into the challenges faced by smaller crypto and Blockchain firms in meeting compliance costs. He proposed a collaborative solution where larger industry players sponsor the compliance expenses for smaller entities.

White articulated VARA’s regulatory approach, emphasizing the agency’s commitment to regulating without impeding the flourishing presence of nearly 2000 Web3 and crypto companies in Dubai, UAE. He stressed, “We aim to establish regulations that are inclusive and accessible to all stakeholders. Engaging with industry and governmental bodies is paramount in refining our framework. While it’s an ongoing process, we are actively exploring avenues to ensure compliance costs are manageable for smaller entities.”

Highlighting the financial burden of compliance, White proposed a model where larger market participants support smaller entities, thereby easing the compliance costs. He remarked, “Our objective is to foster innovation while ensuring regulatory compliance. We are dedicated to facilitating an environment where all players can thrive.”

White reflected on VARA’s inception two years ago, emphasizing Dubai government’s strategic decision to prioritize technology and virtual assets as part of its economic diversification initiative. VARA was established to position Dubai as a global hub for virtual asset activities, emphasizing financial stability and investor protection.

Regarding the possibility of self-regulation through technology, White expressed optimism about its future feasibility. He mentioned plans to explore pilot initiatives in this direction at VARA, stating, “While self-regulation through technology holds promise, regulatory oversight remains essential in the short to medium term.”

In recent developments, Crypto.com made history by becoming the first international crypto exchange to obtain a full license from VARA. Meanwhile, OKX awaits final requirements to secure its full VASP operational license.