UAE Endorses Legal Framework for Unlicensed Virtual Asset Platforms
The United Arab Emirates (UAE) issued new strict anti-money laundering regulations for unlicensed virtual asset service providers to combat cyber financial crimes.
According to UAE regulatory authorities, the latest obligations are designed to support financial institutes in verifying unlicensed crypto services and protect them from misuse for money laundering and terrorist financing. The UAE is the second world’s largest economy, implementing a legal framework to regulate unlicensed crypto platforms, a signal to show their commitment to securing the global financial ecosystem. The Central Bank of the UAE claimed that these new laws are issued under the Act of National Anti-Money Laundering and Financing of Terrorism. It will enhance the financial institution’s security and expand AML compliance derivatives. The UAE government aims to educate the economic sector on how unlicensed crypto service providers are high-risk associated and vulnerable to the integrity of the global financial ecosystem.
The Central Bank stated that the crypto guidance is implemented now because digital currency has become easily accessible to anyone. However, these obligations are designed in collaboration with UAE supervisors to secure operations and digital asset transactions. Governor of the UAE Central Bank and chairman of the committee, Khaled Balama, stated, “as our digital economy matures, our work on combating all kinds of financial crimes intensifies through raising awareness of their risks and emphasising the importance of compliance with relevant regulations and legislation to ensure the integrity of the UAE’s financial system.”
Over the past year, the UAE has shown impressive progress in combating money laundering, terrorist financing, and the proliferation of weapons. They have passed strict regulations to strengthen financial security and curb economic crimes. The purpose of the updated guidance, which is in compliance with the directives of the Financial Action Task Force (FATF), is to provide reporting entities, such as designated non-financial businesses and professions and licensed virtual asset service providers, a thorough road map for improving their corporate governance and operations. The Central Bank stated, “it specifically requires them to remain vigilant of the various fraudulent methods unlicensed Vasps adopt [and] continue to manage money laundering, financing of terrorism and proliferation financing risks effectively.”
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