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  • Part IX – Supervision, Examination and Enforcement

    • A. Investigation or Examination by VARA

      1. All Entities are subject to investigation and/or examination by VARA at any time or in any way deemed necessary by VARA for the purposes of exercising its powers, performing its functions, or fulfilling its objectives under the Dubai VA Law.
      2. All Entities shall co-operate with VARA during any investigation and/or examination and must provide VARA with all books and records requested by VARA to facilitate any investigation and/or examination.
      3. VASPs and Issuers remain subject to Regulations, Rules and Directives for a period of ten [10] years following the date that it is no longer regulated by VARA.
    • B. Examination

      1. All Entities shall allow and assist VARA to examine the Entity whenever in VARA’s judgment such examination is necessary or advisable for the purposes of exercising its powers, performing its functions or fulfilling its objectives under the Dubai VA Law.
      2. VASPs and Issuers shall ensure, without limitation, that VARA is able to determine—
        a. the financial condition of the VASP or Issuer;
        b. the safety and soundness of the conduct of its business, VA Activities or Virtual Asset;
        c. all management and/or operational policies of the VASP or Issuer;
        d. whether the VASP or Issuer has complied with the requirements of all applicable laws, Regulations, Rules and Directives; and
        e. such other matters as determined by VARA which may affect a VASP’s conduct of VA Activities and/or compliance with its licensing conditions.
      3. VASPs and Issuers shall allow and assist VARA in any investigations as it shall deem necessary to determine whether a VASP or Issuer has violated any applicable laws, Regulations, Rules or Directives and, to the extent necessary, shall allow and assist VARA to examine all relevant data, facilities, books, records, accounts, documents, and other information.
      4. VASPs and Issuers shall ensure they have all necessary consent of their clients to report information for transactions over which VARA has jurisdiction.
      5. For the purpose of determining the financial condition of the VASP or Issuer, its safety and soundness practices, or whether it has complied with the requirements of all applicable laws, Regulations, Rules and Directives, VASPs and Issuers shall assist VARA, when in VARA’s judgment it is necessary or advisable, to examine an affiliate of the VASP or Issuer.
      6. VASPs and Issuers shall provide or produce information or documents requested by VARA—
        a. before the end of such period as may be specified in the relevant notice issued by VARA, unless the VASP or Issuer demonstrates to VARA’s satisfaction that such period is unreasonable; and
        b. through such means as may be specified in the notice.
      7. VARA may require any information or documents provided by a VASP or Issuer to be verified or authenticated in such manner as VARA requires.
    • C. Enforcement, Fines and Penalties

      1. VARA may, in its sole and absolute discretion, take enforcement actions against any Entity in the event of the following—
        a. for violation of any law [including the Dubai VA Law and Federal AML-CFT Laws];
        b. for any violation of these Regulations, or any Rules or Directives;
        c. on any ground on which VARA might refuse to issue a Licence under these Regulations;
        d. for Good Cause; and
        e. other grounds determined by VARA in exercising its powers, performing its functions or fulfilling its objectives under the Dubai VA Law.
      2. Such enforcement actions may include but are not limited to—
        a. issuing written reprimands;
        b. issuing enforcement notices requiring non-compliance to be rectified within a specified period of time;
        c. limiting or revising the scope of any Virtual Assets or VA Activities under a Licence;
        d. suspending or revoking a Licence;
        e. requiring a VASP to cease any VA Activity or other business activity, either for a specified or indefinite period of time;
        f. requiring any Entity to stop or refrain from doing or continuing to do any acts and seek a preliminary injunction or other legal means when necessary to restrain such Entity, when deemed by VARA to be in the public interest;
        g. imposing fines or other civil penalties in accordance with Schedule 3 of these Regulations or otherwise published by VARA from time to time;
        h. undertaking additional supervision, monitoring or reporting requirements; and
        i. any other enforcement action determined by VARA.
      3. VARA may impose fines, civil penalties or other enforcement actions directly against the Responsible Individuals of a VASP.
      4. VARA will consider the full circumstances of each case when determining whether or not to issue a fine and the amount thereof. VARA may do this either in conjunction with, or independently of, any other type of enforcement action as set out in Regulation IX.C.2. The types of factors which will be evaluated include—
        a. the nature, seriousness and impact of the violation;
        b. whether any action constitutes a violation of a Market Offence;
        c. the conduct of the Entity after the violation and throughout any investigation or examination by VARA;
        d. the previous disciplinary record and compliance history of the Entity or relevant individual[s], and in particular whether the case involves a first-time violation under No. 3 or No. 4 of Schedule 3 of these Regulations [in which case VARA reserves the right to consider not issuing an immediate fine, and instead mandate effective remedial action to address the impact of the violation];
        e. the interpretation and application of VARA published materials including Guidance, industry codes and other such materials as may be published from time to time; and
        f. any action taken by VARA or by other domestic or international regulatory bodies in similar cases.
      5. Grievances. VARA may establish a committee or other body to hear grievances or complaints in respect of any enforcement action it has taken, the details of which shall be published by VARA from time to time.