August 27, 2023

Dubai’s VARA Allows Crypto Staking for VASPs

Dubai's VARA

Dubai’s VARA

Dubai’s VARA has released an updated version of its Custody Services Rulebook. The new version allows Custody Services to offer staking services to their clients as long as they follow the revised guidelines in the rulebook.

Virtual Asset Service Providers (VASPs) that hold licenses for Custody Services can now offer staking services to their clients as the same legal entity, but only after obtaining additional approval from VARA.

Thanks to the new allowance, It is now unnecessary for VASPs to obtain a separate license for Virtual Asset Management and Investment Services. However, it’s essential to remember that offering such a service requires additional licensing and supervision fees.

As the governing authority, VARA oversees and regulates Virtual Asset services in the Emirate of Dubai, except for the jurisdiction of the Dubai International Financial Centre.

VARA-licensed VASPs offering Custody Services and authorized to provide Staking from Custody Services may offer both through the same legal entity, per Dubai’s regulatory guidelines.

“For the avoidance of doubt, such authorization for, and provision of Staking from Custody Services is considered to be sub-set of the Custody Services Activity, and is hence not subject to the requirement for a separate legal entity stipulated under Rule III.B.5 of this Custody Services Rulebook,” VARA said.

Recently, VARA in Dubai has granted Komainu, a digital asset custody service provider, an operating license.

This joint venture between Nomura, digital asset manager CoinShares, and digital asset security company Ledger had previously obtained a temporary MVP license from VARA in November 2022. With this new authorization, Komainu can offer its complete custody services, such as institutional staking and collateral management, via its Komainu Connect platform to clients in the Emirate.

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