Custodial wallet / SaaS in United Arab Emirates

Dubai layer: VARA is the sole virtual-asset regulator across Dubai's mainland and free zones except the DIFC; it licenses eight activities, including VA Issuance Category 1, and its public register listed 59 active VASPs on 14 October 2026.

ADGM layer: The Financial Services Regulatory Authority (FSRA) regulates financial services, including virtual-asset activity, in the Abu Dhabi Global Market financial free zone under FSMR 2015; it treats virtual assets as tradeable commodities and maintains a consolidated list of Accepted Fiat-Referenced Tokens, nine tokens as of 1 September 2026.

DIFC layer: The DFSA regulates Crypto Tokens generally in the DIFC under GEN 3A, not only investment or security tokens; since 12 January 2026 firms self-assess non-fiat Crypto Tokens for suitability, while a Fiat Crypto Token may be used only if the DFSA is satisfied it is suitable for use in the DIFC.

Federal layer: The Securities and Commodities Authority was renamed the Capital Market Authority (CMA) when Federal Decree-Laws No. 32 and 33 of 2025 took effect on 1 January 2026. Under Cabinet Resolution 111/2022 it supervises investment-purpose virtual assets onshore, including non-financial free zones, but the resolution does not apply to the financial free zones (DIFC, ADGM) or to payment-purpose virtual assets (CBUAE), and in Dubai outside the DIFC VARA licenses VASPs.

Dubai layer (VARA): Under Dubai Law No. 4 of 2022 and the Virtual Assets and Related Activities Regulations 2023, VARA licenses eight activities: Advisory, Broker-Dealer, Custody, Exchange, Lending and Borrowing, Management and Investment, Transfer and Settlement, and VA Issuance Category 1.

ADGM layer (FSRA): ADGM regulates virtual-asset activity under the Financial Services and Markets Regulations 2015 (FSMR), treating virtual assets as tradeable commodities rather than securities, under a crypto-asset framework introduced in 2018. FSRA Consultation Paper No. 7 of 20 August 2024 proposed a new Regulated Activity of Issuing a Fiat-Referenced Token and stated that algorithmic stablecoins will not be permitted in ADGM; the FSRA consolidated list of Accepted Fiat-Referenced Tokens dated 1 September 2026, issued under COBS 17.2A.1, names nine tokens.

Federal layer (Capital Market Authority, the SCA renamed on 1 January 2026): On 13 April 2026 the CMA issued its Virtual Assets Framework, with five modules (General Requirements, Conduct of Business, Alternative Trading System, AML/CFT, Prudential Requirements), and expanded regulated VA activities from three to eight: dealing as principal, dealing as agent, providing custody, arranging custody, arranging investment deals, providing investment advice, portfolio management, and operating a multilateral trading facility.

Dubai layer (VARA): VARA licenses eight activities, and Company Rulebook Rule VI.B.1 sets minimum paid-up capital as the higher of a fixed amount or a share of fixed annual overheads: Exchange AED 1,500,000 or 25% (AED 800,000 or 15% if using VARA-licensed custody); Broker-Dealer AED 600,000 or 25% (AED 400,000 or 15%); Custody AED 600,000 or 25%; Lending and Borrowing, and Transfer and Settlement, AED 500,000 or 25%; Management and Investment AED 500,000 or 25% (AED 280,000 or 15%); Advisory AED 100,000.

Dubai layer (VARA): Custody Services is one of VARA's eight licensed activities, and a VA custodian must be a distinct legal entity with a standalone licence. VARA Company Rulebook Rule VI.B.1 sets custody paid-up capital at the higher of AED 600,000 or 25% of fixed annual overheads, and Rule VI.B.3 requires paid-up capital to be held in a UAE bank trust account or a surety bond naming VARA as beneficiary.

Enhanced custody requirements for regulated firms handling crypto tokens

Client asset segregation and protection standards

Strengthened governance and disclosure requirements for crypto-related activities within the DIFC

Federal Decree-Law No. 26 of 2021 only amended Federal Decree-Law No. 20 of 2018; the current UAE AML/CFT/CPF law is Federal Decree-Law No. 10 of 2025, which repealed Federal Decree-Law No. 20 of 2018 (Article 41) and took effect on 14 October 2025.

Dubai (VARA) Rule III.G.1 of the Compliance and Risk Management Rulebook requires VASPs to comply with all Federal AML-CFT Laws including Travel Rule requirements and treats Rule III.G as a minimum standard; since VARA's circular of 24 February 2026 those federal requirements include the UAE Virtual Assets Travel Rule issued under Cabinet Resolution No. 134 of 2025.

ADGM (FSRA) added section 10.3 "Transfers of Virtual Assets and Fiat-Referenced Tokens and the Travel Rule" to its AML Rulebook on 21 May 2026 (VER11.210526), applying it to all Authorised Persons and Recognised Bodies; in Dubai, VARA applies Rule III.G as a minimum standard supplemented by federal AML-CFT laws.

AED 3,500 is the UAE travel-rule threshold: VARA Rule III.G.2–3 applies originator and beneficiary information duties to VA transfers exceeding AED 3,500, and under the federal UAE Virtual Assets Travel Rule (VARA circular, 24 February 2026) beneficiary identity verification is required at daily aggregated transfers of AED 3,500 or more, while information must accompany transfers below that amount.

ADGM (FSRA) travel rule: AML Rule 10.3.3 (AML Rulebook VER11.210526, added 21 May 2026) requires relevant transfer information to accompany every Virtual Asset or Fiat-Referenced Token transfer with no minimum, but AML 10.3.4(2) waives verification of that information where the originator's daily aggregated transfers are below USD 1,000 and none is suspicious.

The UAE Virtual Assets Travel Rule, issued under Cabinet Resolution No. 134 of 2025 (implementing Federal Decree-Law No. 10 of 2025), applies to all VASPs in the UAE including all free zones and financial free zones; it requires originator and beneficiary information to accompany qualifying VA transfers and requires the originator VASP to confirm the beneficiary VASP is appropriately regulated (VARA circular of 24 February 2026).

Scope: Full responsibility on VASPs for FATF-aligned compliance, beyond standard AML; enforced in licensing regimes like VARA and ADGM.

Dubai (VARA): Compliance and Risk Management Rulebook Rule III.G.4–5 requires the originator's name, account number or VA wallet address and residential or business address, and the beneficiary's name and account number or wallet address; Rule III.G.9 requires VASPs to follow the FATF Interpretive Note to Recommendation 15 and to monitor for transactions structured to circumvent Travel Rule thresholds.

No CBUAE primary was located for fines "totaling hundreds of millions AED" in 2024–2025 against crypto-linked sectors, and the February 2024 FATF grey-list exit could not be confirmed at fatf-gafi.org.

Under Federal Decree-Law No. 10 of 2025, money laundering is punishable by 1–10 years' imprisonment and a fine of AED 100,000–5,000,000 (Art. 26), legal persons face fines of AED 5,000,000–100,000,000 (Art. 27), supervisors may impose administrative fines of AED 10,000–5,000,000 per violation on VASPs (Art. 17), and Art. 20 prohibits VASP activity without a licence or registration.

Privacy and algorithmic tokens were banned onshore from 31 August 2024 by Article 2(3) of the CBUAE Payment Token Services Regulation, including for VASPs licensed by the SCA or a local authority; the DIFC bans them separately under DFSA GEN 3A.2, and VARA's 24 February 2026 travel-rule circular bars VASPs from executing transfers involving Privacy Tokens.

Under Article 170 of Federal Decree-Law No. 6 of 2025 (the CBUAE law, in force 16 September 2025), carrying on a Licensed Financial Activity listed in Article 61(1) without a Central Bank licence or authorisation is punishable by imprisonment and/or a fine of AED 50,000 to AED 500 million. This is the onshore CBUAE layer.

Article 168 of Federal Decree-Law No. 6 of 2025 (the CBUAE law, in force 16 September 2025) lets the Central Bank fine a licensed financial institution up to AED 1 billion, fine an authorised individual AED 100,000 to AED 5 million, and fine any person carrying on or promoting financial activities without a licence at least AED 1 million, alongside powers up to licence revocation.