Crypto in the UAE: Regulation, Licensing, and What’s Next (2025)

The UAE is a global leader in virtual asset adoption, with high levels of user engagement and a supportive legal infrastructure. With 27.67% of the UAE’s population owning virtual assets, the country now leads the world in crypto adoption per capita. 

Crypto in the UAE is growing fast. In just 2024 alone, there were 15 million installations of crypto-related apps in the country—a 41% increase from the previous year. 

Unlike many other economies with high crypto adoption rates, like Turkey and Argentina, the UAE’s virtual assets boom has little to do with high inflation rates. Instead, it’s fueled by a favorable regulatory landscape and strong institutional-level investment, making parts of the country a magnet for tech innovation. Indeed, according to the Sumsub State of the Crypto Industry Report, the UAE is also considered one of the most crypto-friendly countries in the world.

In 2024, the country attracted more than $30 billion in crypto-related investments and, in March 2025, MGX, an Abu Dhabi-based investment fund, made a $2 billion investment in Binance, one of the largest investments ever in the crypto industry. 

This article provides an UAE regulatory landscape, AML/KYC compliance, expected developments, and how to apply for a cryptocurrency license in the UAE.    

Who regulates cryptocurrency in the UAE?

The UAE is a federal union consisting of seven emirates (Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, Fujairah, and Ras Al Khaimah), with two branches of regulation: federal and local, which can be applicable alongside or independently of each other depending on subject matter. As a result, cryptocurrency regulation in the UAE depends on where the business operates. Several authorities oversee virtual assets across different jurisdictions, each playing a distinct role in regulating aspects such as licensing, compliance, and enforcement.

Typically, it is the Central Bank of the UAE (CBUAE) and the Securities Commodities Association (SCA) that govern federal monetary and capital markets in the country. This extends to cryptocurrency and, in 2021, the CBUAE passed guidelines covering VASPs in the UAE, ruling the CBUAE’s anti-money laundering (AML) regulations had to be followed. The SCA handles licensing outside free zones and is responsible for supervising VASPs’ compliance with these requirements, ensuring that they implement robust systems for customer due diligence, transaction monitoring, and suspicious activity reporting, in line with UAE federal AML laws and FATF standards. 

However, as  Abu Dhabi Global Market free zone, Dubai and Dubai International Financial Centre (the “DIFC”) have launched their own virtual asset regulations, the key regulators are now as follows:

Virtual Assets Regulatory Authority (VARA)

Virtual Assets Regulatory Authority (the “VARA”) is the regulator responsible for virtual asset activities in the Emirate of Dubai (including both mainland and free zones, except within the DIFC). It was created to oversee the issuance, trading, and provision of services related to cryptocurrency in Dubai. VARA has introduced comprehensive guidelines and rulebooks to help provide a clear and robust framework to encourage virtual asset innovation while protecting investors.

Dubai Financial Services Authority (DFSA)

The Dubai Financial Services Authority (the “DFSA”) is the financial regulator responsible for the DIFC special economic zone. Its area of responsibility covers the regulation of virtual assets. 

Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA)

The Abu Dhabi Global Market’s Financial Services Regulatory Authority (“FSRA”) regulates virtual assets within the Abu Dhabi Global Market (ADGM), a financial free zone. Since 2018, it has been responsible for overseeing crypto-related businesses, including exchanges, emphasizing AML/KYC compliance following international standards. 

Securities and Commodities Authority (SCA)

The SCA is the UAE’s federal financial regulatory agency. As part of this role, it helps regulate virtual assets across the UAE outside of financial free zones and special economic zones in the UAE. 

Who’s affected?

Under the federal Cabinet Decision No. 111 of 2022, Dubai’s Law No. 4 of 2022, and the Abu Dhabi Global Market’s  Financial Services and Markets Regulations 2015 (with amendments), any entity or individual involved in offering, promoting, or facilitating virtual asset services—including crypto trading and token issuance—must obtain a license to operate in the UAE. 

VASP licensing in the UAE is jurisdiction-specific and must be obtained from one of the following authorities, depending on where the business operates and type of business:

Regulator	Territory of regulation	Who shall obtain the license
SCA	Mainland UAE	1. Virtual asset exchanges 2. Brokerage and trading services dealing with crypto 3. Custodians and wallet providers 4. Fund managers/investment firms dealing with crypto 5. Token issuance platforms 6. Clearing and settlement providers 7. Any entity marketing crypto investment products to the public
VARA	Dubai, including both mainland and free zones, except within the DIFC	1. Virtual asset exchanges  2. Brokerage and trading services dealing with crypto 3. Custodians and wallet providers 4. Virtual asset transfer/payment platforms 5. Virtual asset advisory & portfolio managers 6. Issuers of virtual assets/NFTs  7. Market makers/liquidity providers 8. Virtual asset lending and borrowing platforms 9. Staking/yield services providers
DFSA	Dubai International Financial Centre	1. Advisers and asset managers using crypto tokens 2. Authorized crypto trading platforms 3. Custodians for crypto tokens 4. Token issuance platforms 5. Dealing or arranging deals in Recognised Crypto Tokens 6. Fund operators and portfolio managers dealing in crypto 7. Firms offering staking/yield generation under fund structures
FSRA	Abu Dhabi Global Market free zone	1. Virtual asset exchanges 2. Custodians and wallet providers 3. Brokerage and trading services dealing with crypto 4. Asset managers using virtual assets 5. OTC virtual asset trading platforms 6. Virtual asset derivatives providers 7. Virtual asset transfer/payment platforms 8. ICO/Token issuers (if tokens are classified as regulated)

Licensing requirements for crypto companies in the UAE

The licensing requirements for a virtual asset company to legally operate in the UAE vary depending on jurisdiction. Each jurisdiction has different licensing requirements:

VARA licensing requirements—Dubai (excl. DIFC)

Any entity seeking to engage in virtual asset activities in Dubai (other than DIFC, application details for which can be found here) must seek authorization from VARA before doing so. This includes advisory services, broker-dealer services, custody services, exchange services, lending and borrowing services, management and investment services, transfer and settlement services, and virtual asset issuance. 

VASPs are required to follow VARA’s rulebooks, including compulsory and any other relevant rulebooks. 

For full licensing requirements, see their official website where you can also apply for a license online. 

DIFC

Any entity wishing to operate as a VASP must apply for a license from the DFSA and demonstrate compliance with requirements related to financial crime prevention, risk management, technology governance, and consumer protection. The application process involves submitting a detailed business plan, internal controls framework, and AML/CTF policies. Only firms dealing with DFSA-recognized crypto tokens are eligible for approval.

FSRA licensing requirements—Abu Dhabi Global Market

ADGM was one of the first jurisdictions in the world to issue comprehensive regulations for digital asset activities. Its full rules and regulations are available on its website. Activities that require licensing in ADGM include operating a virtual asset exchange, providing custody services, and advising on virtual assets. 

Its website also provides details on how to apply.

SCA licensing requirements—Federal UAE Mainland

The SCA regulates VASPs operating in the UAE mainland (outside of financial free zones), including exchanges, wallet services, and trading platforms. Such VASPs are subject to securities laws and regulations, including the Cabinet Resolution No. (111) of 2022, the Chairman of the SCA’s Board of Directors’ Decision No. (26/Chairman) of 2023. 

VASPs must apply for SCA approval before engaging in virtual asset activities.    

Dubai Multi Commodities Centre (DMCC) and Ras Al Khaimah Digital Assets Oasis (RAK DAO) also offer licenses for VASPs to operate in these areas, but firms licensed here must still comply with federal regulations under the SCA.

Suggested Read: The Top 10 Crypto-Friendly Countries

How to get a crypto license in the UAE

Step 1: Determine Your Business Activity

First, identify which services you plan to offer. For example, are you operating a virtual asset exchange or issuing a token? 

Step 2: Choose Your Regulatory Jurisdiction

The UAE is a federal country and has multiple jurisdictions. Choose the right regulator considering both your location and which provides the best support for your business model.

Step 3: Prepare the Required Documentation

Regulators typically require:

• A detailed business plan
• Risk management and cybersecurity policies
• AML/KYC procedures aligned with national standards
• Corporate structure and governance documents

Step 4: Meet Financial and Capital Requirements

Minimum capital depends on the type of activity and regulator. In addition to meeting high capital requirements, you may also need to show proof of operating capital and financial health.

Step 5: Submit Your License Application

Apply to the relevant authority with all documentation:

• VARA: Apply via the VARA website
• SCA: Apply via the SCA website
• ADGM: Apply via FSRA’s website
• DIFC: Apply via DIFC’s website

Expect due diligence, background checks, and potential interviews.

Step 6: Await Review and Approval

Regulators will assess your application, including operational suitability and AML and cybersecurity compliance.

This may take some months, depending on the complexity of your application.

Step 7: Launch

After receiving your provisional or full license, you will be ready to operate in the UAE. However, remember you will have ongoing obligations including, but not limited to:

• Regulatory reporting (e.g. financial reporting, compliance reporting etc.)
• Audits
• Compliant with national AML/CFT requirements
• Data, and consumer protection standards

How to comply with AML/KYC regulations for crypto in the UAE in 2025

Through the UAE its regulatory framework the regulated entities shall use a robust AML/KYC framework to virtual asset activities. Non-compliance may lead to fines, license revocation, or even criminal penalties.

In this regard local regulators publish some rulebooks and guidelines regarding the AML, for example:

• Compliance and Risk Rulebook of VARA;
• AML Rulebook of ADGM.

A risk-based approach is fundamental to effectively implementing AML regulations in the UAE. It requires entities to identify, assess, and understand their exposure to money laundering and terrorist financing (ML/TF) risks, and to apply the most appropriate measures to mitigate those risks, including:

• Customer Due Diligence (CDD): Identifying and verifying client identity before onboarding. Enhanced Due Diligence (EDD) may be required for higher-risk clients.
• Ongoing monitoring: Monitoring transactions throughout the whole customer lifecycle for unusual or suspicious patterns.
• Suspicious Activity Reporting (SAR): Filing reports with the UAE Financial Intelligence Unit (via the goAML system) when suspicious activity is detected.
• Record keeping: Maintaining customer and transaction records up to 8 years according to the applicable regulations.
• Sanctions screening: Screening clients against international sanctions lists.
• AML Officer Appointment: Designating a qualified money laundering reporting officer.
• Employee training: Conducting regular AML/KYC staff training.
• Travel Rule: It means to collect, verify and share the data with counterparty VASP.

Note: AML/KYC requirements are subject to change and different regulations across the UAE and should be investigated additionally with local requirements.

Suggested Read: AML/KYC Guide to the UAE—New Laws and Regulations for 2024

Crypto Travel Rule in the UAE

The UAE enforces the Travel Rule in accordance with Federal Decree-Law No. (20) of 2018, Cabinet Decision No. (10) of 2019, and Cabinet Resolution No. (24) of 2022. These align with the FATF’s updated Recommendation 15, which now incorporates the Travel Rule requirements for VASPs.

Under these rules, VASPs must collect, verify, and transmit originator and beneficiary information when processing virtual asset transactions. This is part of the UAE’s broader AML/CFT efforts, overseen at the federal level by the CBUAE and implemented by various regulators of UAE.

Jurisdiction-based requirements

The Travel Rule requirements differ across the UAE’s regulatory zones. Each financial center or authority may set its own compliance threshold and operational guidelines. The threshold for when the Travel Rule applies and required information varies depending on the regulator.

Note: Thresholds and Required Information are subject to change; consult the latest regulator-specific documents or Sumsub’s UAE guidelines.

All data must be securely transmitted to the counterparty VASP, and records must be maintained for at least 5 years. Both parties are also responsible for conducting due diligence and AML screening.

Sumsub offers a built-in Travel Rule bundle tailored for Dubai. Find out more:

Recent updates to UAE crypto regulations

The UAE has introduced several noteworthy updates to its cryptocurrency regulations in 2024 and early 2025, strengthening its reputation as a leading global hub for virtual assets. 

• The CBUAE introduced the Payment Token Services Regulation, allowing only dirham-backed stablecoins and banning algorithmic tokens.
• VARA updated its regulations on the marketing of virtual assets, limiting marketing and promotions, including educational content to licensed entities.
• The SCA and VARA have jointly set a regulatory framework for the UAE’s virtual assets sector, aiming to bolster the country’s global position in the field.
• DFSA announced amendments to its Crypto Token Framework, which came into force on June 3, 2024, that includes: (1) enhanced requirements for the admission of crypto tokens, (2) updated rules on custody and client asset protection, (3) strengthened AML/CTF measures.

Challenges for crypto companies operating in the UAE

While virtual asset companies operating in the UAE benefit from favorable policies and a rigorous regulatory environment, there are several challenges to consider when operating in the country, including:

• Varying standards: The licensing processes and rules of different regulators may not always align. For instance, relying on an expert on compliance in Dubai when operating in Abu Dhabi may lead to negative outcomes. 
• High cost of entry: Licensing and compliance costs can be substantial in the UAE. Firms may need to make considerable investments just to set up in the country.
• Changing regulations –Staying compliant with evolving local updates (e.g., stablecoin rules) require significant resources.

Future of crypto regulation in the UAE

Despite, or indeed thanks to, the challenging regulatory burdens placed on virtual asset businesses operating in the UAE, the country’s crypto industry looks to have a promising and ambitious future. As the sector evolves, the UAE will likely continue balancing innovation with strong regulatory oversight, reinforcing its position as a global hub for virtual assets while aligning with global standards.

Possible developments include:

• More specific licensing regimes 
• Additional rulebooks and guidelines regarding current regulation 
• Alignment with ESG standards

The UAE is likely to continue encouraging virtual asset innovation in the country—especially in its financial free zones like the ADGM—while increasing consumer protections, regulatory clarity, and alignment with international standards. As such, the UAE is positioned not only to remain a stable and competitive virtual assets hub but also to generate considerable innovation in the sector.

• Is cryptocurrency legal in the UAE?

  Yes, cryptocurrency is legal in the UAE. Trading and holding virtual assets are permitted but regulated.

• How is crypto regulated in Dubai?

  The Virtual Assets Regulatory Authority (VARA) monitors virtual asset activities in Dubai. VARA issues licenses while ensuring compliance with AML and consumer protection standards. Virtual assets have a different regulator in the Dubai International Financial Centre (DIFC).

• Do you need a license to trade crypto in the UAE?

  While individuals trading crypto for personal investment do not need a license, businesses offering virtual asset trading services must obtain a license from a relevant authority.

• What is VARA in Dubai?

  The Virtual Assets Regulatory Authority (VARA) is Dubai’s independent regulator for virtual assets. Established in 2022, VARA oversees virtual asset activities across Dubai’s free zones and mainland, excluding the Dubai International Financial Centre (DIFC). ​

• Can foreigners open a crypto company in the UAE?

  Yes, foreigners can operate a virtual asset company in the UAE. The UAE’s free zones allow for 100% foreign ownership.