Part I – Licence Requirements
A. General Requirement
1. All Entities in the Emirate that issue a Virtual Asset in the course of a business, must comply with this VA Issuance Rulebook, as may be amended by VARA from time to time. 2. “In the course of a business” requirement. For the purposes of Rule I.A.1 of this VA Issuance Rulebook, in determining whether an Entity has issued a Virtual Asset in the course of a business, VARA shall retain sole and absolute discretion, with the following factors forming part of the consideration criteria—
a. whether the Entity holds itself out as issuing the Virtual Asset in the course of a business; b. the regularity and scale with which the Entity issues Virtual Assets; c. whether there is any direct or indirect commercial element to the Virtual Asset or in how the Virtual Asset is issued, d. whether the Entity receives remuneration, incentive or other value in kind benefit, e. whether the Entity is related to any commercial or business activity in any way; f. includes not-for-profit, non-profit and charitable organisations, foundations, associations and associated activity(ies); g. Category 1 VA Issuances are, in all events without exception, deemed to be carried out in the course of a business; and h. VA issuances that do not fall under Category 1, and that are carried out solely for personal and/or non-commercial use, may not be deemed to be issued in the course of a business.
3. VARA will, from time to time, assign categorisations to the issuance of certain types of Virtual Assets depending on the nature of the issuance and/or underlying business model associated with the Virtual Asset. VARA may impose additional specific or nuanced requirements on such issuances which, unless otherwise stated, will apply in addition to the requirement for the Issuer to obtain a Licence and/or thereafter obtain prior approval from VARA of the Whitepaper. B. Prohibited Virtual Assets
1. As specified in the Regulations, issuing Anonymity-Enhanced Cryptocurrencies and all VA Activity(ies) related to them are prohibited in the Emirate.
C. VA issuance Categories and Prior Requirements
1. VA issuances in the Emirate are categorised, along with the applicable requirement prior to the Virtual Asset being issued, as follows—
Category Applicable types of VA issuances Prior requirement Category 1 issuance of—(i) Fiat-Referenced Virtual Assets (“FRVAs”); (ii) Asset-Referenced Virtual Assets (“ARVAs”); or (iii) other Virtual Assets as may be determined by VARA from time to time. VARA Licence. Category 2 Issuance of any Virtual Asset which does not constitute—(i) a Category 1 VA Issuance; or (ii) an Exempt VA. No VARA Licence required, but all placement or distribution must be carried out through or by a Licensed Distributor. Exempt VAs Issuance of any Virtual Asset which does not constitute a Category 1 VA Issuance and is either—
(i) a Non-Transferable Virtual Asset; (ii) a Redeemable Closed-Loop Virtual Asset; or (iii) other Virtual Asset as may be determined by VARA from time to time. No requirements prior to issuance. 2. When determining the category of a VA issuance, VARA will consider all factors it deems appropriate, including but not limited to, the—
a. nature of all Virtual Assets or types of Virtual Assets; b. rights and/or value which the Virtual Asset represents or purports to represent; and c. the underlying business model associated with the Virtual Asset.
3. If any change is proposed to a Virtual Asset which may result in its issuance no longer qualifying under the original categorisation in Rule I.C.1 of this VA Issuance Rulebook, the Issuer must comply with all requirements of the category under which the Virtual Asset will fall after such change has been made. The Issuer must ensure all such future requirements are met prior to any proposed change to the Virtual Asset taking effect which, for the avoidance of doubt, may include the Issuer obtaining a Licence from VARA and/or thereafter obtaining prior approval from VARA of the Whitepaper, where necessary. D. Category 1 VA Issuance
1. No Entity in the Emirate may carry out any Category 1 VA Issuance, unless it is authorised and Licensed by VARA for the VA issuance. 2. As stated in the Regulations, carrying out Category 1 VA Issuance is a VA Activity. In addition to compliance with this VA Issuance Rulebook, and all other Regulations, Rules and Directives as communicated by VARA in its Licence, or otherwise from time to time, all Entities seeking to carry out Category 1 VA Issuance will be required to comply with the following Rulebooks—
a. Company Rulebook; b. Compliance and Risk Management Rulebook; c. Technology and Information Rulebook; and d. Market Conduct Rulebook.
3. For the avoidance of doubt, all Rules in Rulebooks apply cumulatively in addition to all other requirements in the Regulations, Rules and Directive and as such, in the event of overlap, the higher standard of compliance must be met at all times. 4. Licensing process. All Entities seeking a Licence from VARA to carry out Category 1 VA Issuance shall adhere to the licensing process as prescribed by VARA from time to time when applying for such Licence. 5. FRVA Rules. All Entities seeking to carry out the issuance of an FRVA will, in addition to compliance with all other Regulations, Rules and Directives as communicated by VARA in its Licence, or otherwise from time to time, be required to comply with the FRVA Rules in Annex 27 of this VA Issuance Rulebook at all times. 6. ARVA Rules. All Entity seeking to carry out the issuance of an ARVA will, in addition to compliance with all other Regulations, Rules and Directives as communicated by VARA in its Licence, or otherwise from time to time, be required to comply with the ARVA Rules in Annex 2 of this VA Issuance Rulebook, at all times. 7. Revocation or Suspension. VARA may, in its sole and absolute discretion, revoke a Licence for Category 1 VA Issuance in the event of any of the following—
a. the Entity which has received the Licence has not issued the Virtual Asset within six (6) months after the approval has been granted; b. the Entity which has received the Licence obtained the Licence by making false or misleading statements including, but not limited to, in the Whitepaper, during the licensing process in Rule I.D.4 above, or in any other communications with VARA or the public; c. the Entity which has received the Licence no longer meets, or is in breach of, any of the conditions imposed by VARA in relation to the Licence; d. infringement of any Regulation, Rule or Directive; e. violation of any regulatory requirements applicable in other jurisdictions; f. the Entity which has received the Licence is Insolvent, subject to Insolvency Proceedings or otherwise has been put under an orderly wind-down plan in accordance with applicable insolvency laws; g. the Entity which has received the Licence has decided to stop its operations; h. on any ground on which VARA might refuse to issue a Licence; i. for Good Cause; or j. other grounds determined by VARA in exercising its powers, performing its functions or fulfilling its objectives under the Dubai VA Law.
8. Entities shall immediately notify VARA of any of the situations referred to in Rule I.D.7 of this VA Issuance Rulebook.
E. Category 2 VA Issuance
1. Entities in the Emirate may only issue Virtual Assets that fall within Category 2 above provided that, all placement and distribution is carried out by a Licensed Distributor. 2. Provided that Rule I.E.1 of this VA Issuance Rulebook is met, Entities in the Emirate that issue Virtual Assets that fall within Category 2 above do not need prior approval from VARA. 3. Licensed Distributors who provide Licensed Distribution Services to Issuers of Virtual Assets that fall within Category 2 above, assume the responsibility for assuring and validating that the Issuer complies with this VA Issuance Rulebook. 4. Licensed Distributors who provide Licensed Distribution Services to Issuers of Virtual Assets that fall within Category 2 above, must continue to comply with all other applicable Regulations, Rules and Directives, as well as any conditions of their Licence, at all times when providing such services. 5. No Virtual Asset issued under Category 2 shall be deemed in any way to have been approved by VARA and may not be construed or considered as such. VARA makes no representation and does not provide any warranties regarding any Issuer or Virtual Asset including, but not limited to, their fitness for purpose, suitability or regulatory status in any jurisdiction.
F. Exempt VAs
1. Entities in the Emirate may issue Exempt VAs without prior approval from VARA, provided that, they comply with Part II of this VA Issuance Rulebook at all times. 2. Issuers of Exempt VAs issued in accordance with Rule I.F.1 of this VA Issuance Rulebook shall remain subject to VARA’s supervision, examination and enforcement at all times, in accordance with Part IV of this VA Issuance Rulebook.