GLD FZE is an Entity incorporated in a free zone within the Emirate. GLD FZE wants to issue a Virtual Asset called GLD1 which maintains a stable value with reference to the price of one (1) ounce of gold. Purchasers of GLD1 can mint GLD1 by sending GLD FZE the current value of one (1) ounce of gold and in return will receive one (1) GLD1. Owners of GLD1 can also redeem the current value of one (1) ounce of gold by sending GLD1 back to GLD FZE.
 

Key considerations: Issuing GLD1 would be categorised as a Category 1 VA Issuance under the VA Issuance Rulebook and, as such, GLD FZE would require a Category 1 VA Issuance Licence from VARA prior to issuing GLD1. The reason for this is that gold constitutes an RWA under VARA's definition as it is a ‘physical and/or tangible asset’ and GLD1 purports to maintain a stable value or reference to gold (i.e. an RWA).
 

As part of GLD FZE's application to VARA for a Category 1 VA Issuance Licence, GLD FZE will need to clearly describe in the Whitepaper how GLD1 maintains a stable value with reference to one (1) ounce of gold, as planned. This will require GLD FZE to maintain sufficient and acceptable Reserve Assets such that the risks associated with the rights and/or value that GLD1 grants, or purports to grant, owners of GLD1 are secured. Given the nature of GLD1 this will likely require GLD FZE to hold Reserve Assets in gold and/or regulated gold derivative contracts, equal to or exceeding the circulating supply of GLD1, at all times.
 

As owners of GLD1 have a right of redemption, GLD FZE will need to manage liquidity risks associated with the Reserve Assets. GLD FZE will need to offer owners of GLD1 the right to redeem their GLD1 for its value in Dirhams (AED) as well as any other options that may be offered.
 

RE FZE is an Entity incorporated in a free zone within the Emirate. RE FZE wants to issue a Virtual Asset called RE1 which gives owners a right to income received from a portfolio of real estate properties in Dubai. The income will be in the form of both rental income and a share in the profits received from any sales of the real estate property. RE1 does not give owners any direct right of ownership in the real estate properties themselves, nor does it provide any right of redemption against RE FZE. The value of RE1 can only be realised by its owners through selling their RE1 or in the limited circumstances of a winding down or insolvency of RE FZE.
 

Key considerations: Issuing RE1 would be categorised as a Category 1 VA Issuance under the VA Issuance Rulebook and, as such, RE FZE would require a Category 1 VA Issuance Licence from VARA prior to issuing RE1.
 

The reason for this is that real estate property constitutes an RWA under VARA's definition as it is a ‘physical and/or tangible asset’. Rental income and a share in the profits received from any sales would constitute "Income" under VARA's definition as it is value originating or deriving from an RWA (i.e. the real estate property). RE1 therefore represents, or purports to represent, a direct current and future entitlement to receive or share in Income.
 

As part of RE FZE's application to VARA for a Category 1 VA Issuance Licence, RE FZE will need to clearly describe in the Whitepaper how it will ensure that RE1 maintains the rights and value that it grants, or purports to grant, to owners. This will include, but is not limited to, scenarios in the event that RE FZE is wound down or becomes insolvent.
 

ORC FZE is an Entity incorporated in a free zone within the Emirate. ORC FZE is developing an advanced oracle solution which allows applications built on major public blockchains to obtain price feeds and other data from off-chain sources. Users of the oracle software that ORC FZE is developing will be able to interact with the oracle software by sending a Virtual Asset called ORC to pay for requests and receive data from the oracle. ORC will be available for purchasing on multiple venues and is freely transferable to any compatible VA Wallet.
 

Key considerations: ORC FZE is the Issuer of the ORC Virtual Asset as it is the Entity that will create and maintain it for the purpose of its oracle solution. ORC FZE will determine the features of ORC as well as being responsible for the rights and/or obligations that the token represents.
 

The issuance of ORC would fall within Category 2 under the VA Issuance Rulebook for the following reasons:
 

As a result, ORC FZE does not need VARA's prior approval before issuing ORC, however in order to comply with the VA Issuance Rulebook, ORC FZE must ensure that all placing and distribution of ORC is carried out through or by a Licensed Distributor.
 

LDS FZE is a VASP that is Licensed by VARA to carry out Broker-Dealer Services. LDS FZE has been approached by ORC FZE to provide placement and distribution services to ensure the launch of its ORC Virtual Asset is carried out in a compliant manner, in accordance with the VARA VA Issuance Rulebook.
 

Key considerations: As explained in Illustrative Example C above, issuing ORC falls within Category 2. As a result, ORC FZE must ensure that all placing and distribution of ORC is carried out through or by a Licensed Distributor. As LDS FZE is a VASP that is Licensed by VARA to carry out Broker-Dealer Services, LDS FZE qualifies as a Licensed Distributor and can provide such placing and distribution services.
 

In order to meet the requirements in Part IV (Licensed Distribution Services Rules) of the Broker-Dealer Services Rulebook, LDS FZE must ensure, beyond all reasonable doubt, the quality of both ORC FZE as an Issuer and ORC as the Virtual Asset, before carrying out any placement or distribution of ORC.
 

‘Quality’ is explained fully in Rule IV.B.2 of the Broker-Dealer Services Rulebook and includes all factors relevant to the assurance of, but not limited to, the following:
 

LDS FZE must complete due diligence assessments of both ORC FZE and the ORC Virtual Asset in accordance with Rules IV.B.3 and IV.B.4 of the Broker-Dealer Services Rulebook. LDS FZE must submit reports from both of those due diligence assessments to VARA, along with the Whitepaper and the Risk Disclosure Statement relating to ORC. LDS FZE must also submit a signed declaration stating it has complied with Rule IV.B.1 of the Broker-Dealer Services Rulebook, above.
 

LDS FZE must wait for a period of fifteen (15) Working Days, starting on the first Working Day after the submissions to VARA are made, before it can place or distribute ORC. This is called the “Submission Period". If LDS FZE does not receive any comment or objection from VARA during this period, it is free to distribute or place ORC after the Submission Period has ended. If VARA does make any comments or objections, LDS FZE must address or remedy them to VARA's satisfaction before it can place or distribute ORC.
 

For the avoidance of doubt, in no event does VARA approve any Virtual Asset, Issuer or Licensed Distribution Services by virtue of a VASP's compliance with this process including, where a Submission Period passes without comment or objection from VARA. LDS FZE must ensure the following disclaimer is included in all documentation relating to ORC including, but not limited to, the Whitepaper:
 

“VARA has not made any 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 other than the Emirate of Dubai, UAE."
 

EVA FZE is an Entity incorporated in the Emirate which owns and operates a luxury retail brand. As part of the celebrations of its 10-year anniversary, EVA FZE wants to issue a commemorative Virtual Asset to its most loyal customers called EVA1. EVA1 will be issued to selected customers only, chosen by EVA FZE, and will not be transferable between VA Wallets once issued. The EVA1 collection is not available for purchase and customers will be chosen based on past retail purchasing history. EVA1 is purely commemorative and does not provide customers with any rights of redemption or discount.
 

Key considerations: EVA FZE is able to issue the EVA1 collection as an Exempt VA under the VA Issuance Rulebook without the need to prepare a Whitepaper or Risk Disclosure Statement. This is because the EVA1 Virtual Asset constitutes a Non-Transferable Virtual Asset on the basis it is not being sold, provides no rights of redemption or discount and is not transferable between VA Wallets.
 

EVA FZE must still comply with Part II (General Rules) of the VA Issuance Rulebook which includes acting with integrity, honesty and fairness and remains under the supervisory, examination and enforcement powers of VARA as an Issuer of a Virtual Asset in the Emirate.
 

Key considerations: As explained above, Part III.B of the VA Issuance Rulebook requires all Entities in the Emirate that issue a Virtual Asset to publish a Whitepaper (except for Exempt VAs only). Whitepapers must include the relevant disclosures set out in Schedule 1 of the VA Issuance Rulebook.
 

When creating Whitepapers, Issuers are subject to Rule II.1.d of the VA Issuance Rulebook which states that, “All Issuers must ensure that all communications and disclosures, including but not limited to those applicable in Part III of this VA Issuance Rulebook, are clear, concise, effective and contain all information necessary for owners and/or prospective owners of the Virtual Asset to make an informed decision and be kept up-to-date".
 

The following sub-sections below provide fictional clauses which alone would not meet the Whitepaper requirements in the VA Issuance Rulebook.
 

The following two examples are clauses which breach Rule III.B.3 of the VA Issuance Rulebook, as they attempt to exclude liability in respect of information in the Whitepaper:
 

Key considerations: Clause (1) does not comply with Rule III.B.3 of the VA Issuance Rulebook because it explicitly excludes liability for the Issuer in respect of information provided in the Whitepaper, including any errors or omissions.
 

Key considerations: Clause (2) does not comply with Rule III.B.3 of the VA Issuance Rulebook because it aims to exclude the Issuers liability for information in the Whitepaper by stating that no reliance should be placed on such information. This aims to limit the recourse owners or prospective owners may have against the Issuer if such information is false or misleading, which undermines the accountability that the Issuer should have for such disclosures and shifts all risk to the owners or prospective owners when relying on that information.
 

The following three clauses are examples of disclosures about the Issuer which do not comply with Schedule 1.B.A:
 

Key considerations: Clause (3) fails item B.A.vi of Schedule 1 because it employs subjective language without providing factual information about the Issuer's business activities. Additionally, the clause makes vague assertions about regulatory compliance that may mislead prospective investors without disclosing the specific regulatory licenses under which the Issuer operates. VARA requires Issuers to disclose any licenses granted by VARA, as well any regulatory licenses from other authorities. Without full disclosure regarding the regulatory status, prospective Virtual Asset owners cannot independently verify the Issuer's regulatory status.
 

Key considerations: Clause (4) does not comply with item B.A.viii of Schedule 1 because, in claiming strong financial performance, it only provides promotional language without quantified financial metrics (e.g. revenue, expenses, profit/loss). For projects which have a track record, year-over-year data should be provided covering the periods described along with other relevant performance metrics, in order to provide a balanced analysis of the Issuer's performance.
 

Key considerations: Clause (5) on its own fails item B.A.ix of Schedule 1 as it only provides a generic descriptions such as “experienced management" and “best practices" without providing further details. Issuers claiming corporate governance practices in line with international best practice should be able to provide further details of such governance structures, such as organisational structures, boards and/or committees including their composition, responsibilities and meeting frequency. Without more detail, prospective Virtual Asset owners cannot assess whether governance arrangements adequately protect their interests and/or are in fact in line with international corporate governance best practices.
 

The following three clauses are examples of disclosures about the Virtual Asset which do not comply with Schedule 1.B.B:
 

Key considerations: Clause (6) does not sufficiently cover item B.B.iii of Schedule 1 because it does not provide information on things such as roadmap, timelines, resource allocations, or success criteria for any stated plans. Issuers making such assertions as those included above should include specific, time-bound milestones with quantified success criteria Those may include where applicable which additional features are contemplated, which new trading platforms are planned, when enhancements are planned to be launched, and how much has been allocated to development. The clause also fails to distinguish between completed and planned milestones, creating ambiguity about actual track record versus aspirational goals.
 

Prospective Virtual Asset owners need visibility into the Issuer's capability to deliver promised enhancements in order to assess whether the project as a whole, including delays or abandonment of milestones, is within their risk appetite for the Virtual Asset.
 

Key considerations: Clause (7) does not conform to item B.B.iv of Schedule 1 because it makes a general claim about global availability without disclosing specific geographic, legal entity, or sanctions-based restrictions that apply. VARA requires Issuers to identify the precise jurisdictions where a Virtual Asset is not prohibited and any applicable restrictions on the types or classifications of investors who may own the Virtual Asset. Without this disclosure, prospective Virtual Asset owners cannot determine whether they are eligible to hold the Virtual Asset or whether the intended use cases are permitted.
 

Key considerations: Clause (8) fails item B.B.v of Schedule 1 by only vaguely referencing “major cryptocurrency exchanges" and “decentralized platforms" without naming specific venues or trading platforms where the Virtual Asset is currently available. This allows prospective owners of the Virtual Asset to assess secondary market tradability and associated costs.
 

The following six clauses are examples of disclosures about an Asset-Referenced Virtual Asset which do not comply with the additional disclosure requirements relating to ARVAs in Part II of Annex 2 of the VA Issuance Rulebook:
 

Key considerations: Clause (9) alone does not comply with Rule II.A.1.a. of Annex 2. This is because it uses vague language such as “exposure", “stable value" and “prudent reserve management" instead of clearly describing the specific legal rights granted to ARVA owners. Issuers must state unequivocally what rights owners and/holder of the ARVA will have including, as applicable, whether the ARVA grants a direct right ownership, a beneficial interest, contractual redemption rights, or other form of rights in or over the Reference Asset or Reserve Assets.
 

In addition, it provides no detailed information on how such value will be derived or maintained, leaving prospective ARVA owners unable to assess the credibility of the claim that it will maintain a stable value relative to the pool of assets.
 

Key considerations: Clause (10) fails to comply with Rule II.A.1.b. of Annex 2 by not providing substantive disclosure about the Reference Asset. VARA requires Issuers to provide full details including specific assets and/or asset classes where applicable. Clause (10) also does not provide any information about how those assets will be selected such as minimum ratings, maturity limits, liquidity metrics, or diversification rules. Prospective ARVA owners cannot assess whether the Reference Assets meet their objectives and/or standards based on this description alone.
 

Key considerations: Clause (11) does not comply with Rule II.A.1.c. of Annex 2 because it does not include the circumstances in which any such changes may take place.
 

Key considerations: Clause (12) does not comply with Rule II.A.1.d. of Annex 2 because it does not provide sufficient detail on the legal rights that the ARVA grants. VARA requires an explicit statement whether an ARVA represents direct ownership or title to an RWA, or another right such as beneficial ownership or a contractual claim. The Issuer must provide all relevant details in this regard in the Whitepaper. As a result this clause lacks material information that a prospective owner would need to assess the ownership and/or rights granted by the ARVA and make an informed decision.
 

Key considerations: Clause (13) alone does not comply with Rule II.A.1.f. of Annex 2, as it fails to explain how the stable value will be maintained. The Whitepaper must include a detailed description of how such stable value is intended to be maintained including, for example, the composition and weighting of each type of Reserve Asset. In addition, simply stating “active management" provides no transparency about how the Reserve Assets are managed, leaving prospective owners unable to assess the claim it will maintain a stable value or compare it to alternatives.
 

Key considerations: Clause (14) does not comply with Rule II.A.1.h. of Annex 2 by not providing sufficient details of the types and composition of Reserve Assets and the criteria for how such Reserve Assets are identified. The types and composition of Reserve Assets should include both asset classes, and specific assets. In addition, Issuers should describe the identification criteria for such assets and how they may change in future including minimum ratings, liquidity tests and diversification rules, where applicable, in order to ensure that prospective owners of the ARVA may assess the quality of the Reserve Assets.
 

Key considerations: Part III of the VA Issuance Rulebook also requires all Entities in the Emirate that issue a Virtual Asset to publish a Risk Disclosure Statement (except for Exempt VAs only). Risk Disclosure Statements must comply with the Rules set out in Part III.C of the VA Issuance Rulebook.
 

The following are two examples of disclosures in a Risk Disclosure Statement which do not comply with Part III.C:
 

Key considerations: Disclosure (1) does not comply with Rule III.C.1 because the language is generic and not-specific to the material risks relating to the Virtual Asset being issued. Issuers should establish a clear link to the Issuer and/or Virtual Asset being issued and refrain from using catch-all phrases applicable to any Issuer. Issuers should provide clear and detailed explanations of such risks, considering their probability and magnitude, and also explain the consequences of such risks.
 

Key considerations: Risk Disclosure Statements must disclose material risks in a concise manner. Disclosure (2) states a risk which it then explains is not applicable and/or material. If factors render a risk non-material, the Risk Disclosure Statement should not mention it at all.