Privacy Token Operations Are Not Allowed, Says Dubai’s Crypto Regulator

The cryptocurrency and virtual asset regulatory authority in Dubai are not showing any kind of flexibility or leniency towards private coins.

The reports suggest that the virtual asset regulator in Dubai has prohibited any kind of activities involving the privacy coins.

VARA Prohibits Privacy Coins

The Virtual Assets Regulatory Authority (VARA) is the crypto regulator in Dubai and it has decided not to let the privacy coins circulate in the region.

The privacy coins have proven to be quite troublesome for the regulators and the financial systems of any country.

This is the reason why privacy coins are banned and prohibited from operating in the United States as well. The most prominent and common examples of privacy coins are Zcash (ZEC) and Monero (XMR).

Domestic Rules of the Crypto Sector

Dubai wants to turn its state into a hub for cryptocurrency assets. It has set its goal to gain worldwide recognition as a crypto hub.

To achieve this, the Dubai Government and the regulatory authorities have combined their resources and efforts to accommodate the crypto industry to the highest level.

Still, the regulatory authorities in Dubai do not want to get carried away when it comes to the adoption of cryptocurrencies.

To deal with this situation, the regulatory authority in Dubai has ensured that the cryptocurrency sector in the state is governed by certain domestic rules.

According to the Dubai authorities, this is the right approach for them to make their state an international hub for cryptocurrency assets.

New Policy in Dubai

It is important to mention here that the privacy coins were not banned or prohibited in Dubai, to begin with. Initially, Dubai authorities welcomed all the cryptocurrencies that the firms and projects had to offer.

However, as the crypto market has started to mature in Dubai, the Arab Emirate State has decided to make things more regulated and streamlined.

The privacy coins have a very high tendency of supporting money laundering and terrorist funding activities. Therefore, it is very important that such platforms and cryptocurrencies are discouraged.

To make it happen, VARA has made necessary changes to the cryptocurrency rules in the state. The new rules clearly state that any kind of activity involving the privacy coins is prohibited.

The rule is pretty straightforward none of the cryptocurrency firms or users in Dubai are to interact with the privacy coins.

The regulator has named two major privacy coins that are ZEC and XMR. The regulator has made it clear that no one should be interacting with the likes of ZEC and XMR or there will be consequences.

Dubai is known to be the financial heart of the Emirates. Therefore, if Dubai authorities are coming up with these laws against the privacy coins, it is only a matter of time before other states do the same.

Soon, the cryptocurrency trading platforms, exchanges, lending, and asset management firms may denounce the privacy coins in Dubai.

Authorization Rules have been Made Stricter

The VARA has even made the existing rules and regulations surrounding cryptocurrencies even stricter in Dubai.

According to the regulator, every cryptocurrency firm must have itself authorized and licensed by the crypto watchdog before it can operate in Dubai.

They have to ensure that they are registered and meet the operational requirements before they offer services in a particular region.

As per the regulator, the crypto firms applying for a license must ensure that they strictly adhere to the global regulatory requirements.

These requirements include marketing protocols, anti-money laundering obligations, and know-your-customer protocols.

In addition to the above, the firms must also ensure that they do not end up offering assets that are classified as criminal assets. The new rules also ensure that insider trading is also prohibited in the crypto industry.

This is an alarming situation for the holders and investors of the privacy coins as their prices may face huge declines due to Dubai’s latest decision.