The United Arab Emirates (UAE) has adopted a law on the management of virtual assets, establishing its country's basic regulatory rules and regulations on digital currency areas in terms of the federal government.

Prior to federal regulation, the UAE had already launched several types of regulation of digital currencies in the free economic zone, such as the Abu Dhabi International Market (ADGM). Last year, the UAE also set up its own password regulatory organization called the Virtual Asset Regulatory Authority (VARA).

Irina Schiff, a technologist in password and blockchain technology in the United Arab Emirates, explains that the move has several hazards. According to Heaver, a new law ensures that the entity line of password activity must be licensed and approved by the new regulatory body. Failure to comply with the requirements may result in heavy penalties. She explained:

Failure to comply with the requirements can lead to severe bans, such as penalties of up to 10 million AED ($2.7 million), return of profits, and even criminal investigations by prosecutors.

Schiffer noted that the law is expected to come into effect on January 14 and comply with data encryption entrepreneurs who are required to operate in the country. "every new data encryption and Web3 project operating in the UAE must have a way to comply with a new federal law and all current laws," she explained.

In addition, while the minimum requirements of virtual asset service providers (VASP) can be met, the lawyer believes that many companies may encounter some difficulties. "this kind of reality is very real," he said. However, practice shows that most password enterprises can not even achieve the basic principles.

The password teacher also said that the law also defines the minimum requirements for VASP. According to Heaver, all VASP must comply with existing standard laws on severely cracking down on money laundering, supporting terrorist organizations and supporting illegal organizations. In addition, all legal entities belonging to the type of VAT will have three months to adapt to and comply with the new law.

Although a law has been put in place to focus on protecting customers, Schiff found it exciting to avoid attempts to commit fraud on physical lines close to FTX. VARA of the United Arab Emirates gave FTX permission before it withdrew its FTX last November. That's right, she points out.

In terms of the relevant evidence, FTX is a serious fraud at a level that makes Madoff look like an angel. Unfortunately, laws at all levels cannot protect us from harm caused by those who intend to commit crimes.

All in all, the lawyer believes that this new opportunity is good for the founders, investors and consumers of the UAE, and that the quality of the regulatory picture makes the UAE an appropriate standard for "the home of global Web3".