As the UAE strengthens its position as a global hub for virtual assets, two regulatory bodies have emerged at the forefront: the Securities and Commodities Authority (SCA) and Dubai’s Virtual Assets Regulatory Authority (VARA). For firms looking to offer crypto-related services in the region, understanding the key differences between these two licences is essential for choosing the right regulatory pathway.
SCA (Securities and Commodities Authority)
The SCA is the federal regulator overseeing financial markets and securities across the UAE (excluding the financial free zones like DIFC and ADGM). Although DIFC and ADGM are excluded from SCA’s remit, both have developed their own comprehensive crypto regulatory frameworks:
- DIFC (Dubai International Financial Centre): Regulated by the Dubai Financial Services Authority (DFSA), which introduced a Crypto Token regime in 2022. This regime provides clear rules for the issuance, trading, and custody of crypto tokens within the DIFC.
- ADGM (Abu Dhabi Global Market): Governed by the Financial Services Regulatory Authority (FSRA), ADGM was the first UAE jurisdiction to implement a dedicated regulatory framework for digital assets back in 2018, offering clear rules for exchanges, custodians, and other VASPs.
These frameworks operate independently of both the SCA and VARA regimes and are important considerations for firms assessing their market entry strategy in the UAE.
In 2023, the SCA introduced a regulatory framework for virtual asset service providers (VASPs) operating in the UAE mainland.
Key features of the SCA crypto licence:
- Federal jurisdiction: Applies to firms operating across the UAE (excluding DIFC and ADGM).
- Broad scope: Covers activities including brokerage, custody, exchange services, and virtual asset issuance.
- Capital requirements: Vary based on the type of activity, with detailed obligations around risk management and compliance.
- Alignment with international standards: The SCA’s framework incorporates FATF recommendations, emphasising AML/CTF obligations.
VARA (Virtual Assets Regulatory Authority)
VARA is the dedicated regulator for virtual assets in Dubai (excluding DIFC), created under Law No. 4 of 2022. On 7 February 2023, VARA issued its Virtual Assets and Related Activities Regulations, establishing a comprehensive framework governing all virtual asset activities in Dubai. It is focused exclusively on overseeing the virtual asset sector and has developed a unique regulatory regime for the Emirate.
Key features of the VARA crypto licence:
- Dubai-specific jurisdiction: Applies to entities operating in the Emirate of Dubai (except DIFC).
- Focused on innovation: Supports firms in emerging blockchain and Web3 sectors, including token issuance, NFT platforms, and crypto exchanges.
- Licence tiers: VARA offers multiple licence categories (e.g., Advisory, Broker-Dealer, Custody, Exchange, Lending/Borrowing), tailored to the firm’s activity.
- Regulatory clarity: VARA provides clear operational guidelines, including marketing regulations and technology governance.
Key Differences at a Glance
| Feature | SCA Licence (Federal) | VARA Licence (Dubai) |
| Jurisdiction | UAE mainland (excluding DIFC/ADGM) | Emirate of Dubai (excluding DIFC) |
| Regulator | Securities and Commodities Authority (SCA) | Virtual Assets Regulatory Authority (VARA) |
| Focus | Traditional financial oversight | Innovation in virtual assets and blockchain |
| Licence structure | Activity-based with varying capital thresholds | Tiered based on specific crypto services |
| Key audience | Firms offering investment-related crypto services | Start-ups and exchanges in the Web3 space |
How Complyport Can Support
Whether you are looking to enter the UAE mainland market under the SCA regime or establish your presence in Dubai through VARA, Complyport UAE is here to help.
With a deep understanding of both frameworks and on-the-ground support in the UAE, we offer end-to-end assistance with your licence application. From regulatory gap assessments and business model alignment to compliance documentation and ongoing advisory, our team ensures you’re prepared at every stage.
Our services include:
- Regulatory analysis to determine the best jurisdiction and licence
- Preparation and submission of licence applications
- Policy drafting and AML/CTF framework development
- Ongoing compliance and governance support post-licensing
Ready to Apply?
Speak to our team today to explore how we can support your virtual asset business in the UAE. Whether it’s the federal route via the SCA or the innovative landscape of Dubai’s VARA, Complyport combines global expertise with local knowledge to guide your firm confidently through the process.
