An investor must first create a company with the Dubai Multi Commodities Center (DMCC) before obtaining a Cryptocurrency License to execute the appropriate commercial operations. An investor can supply cryptocurrency-related services (storage, management, trading, Bitcoin solutions, software applications, advisory, services, etc.) to clients with a Crypto License in DMCC.
Cryptocurrency licenses in the United Arab Emirates are currently constrained by rigorous requirements set by both the UAE government and the Central Bank. In the future, it is expected to become a mainstream business field.
In new technology domains such as blockchain and cryptocurrency, the UAE has made amazing development. The UAE’s Blockchain Strategy 2021 and the Crypto Centre established by the Dubai Multi Commodities Centre (DMCC) free zone are two notable examples of the UAE’s digital innovation leapfrogging. At a time when the government is pushing the crypto business, we can easily assume that the atmosphere for company formation in Dubai, UAE is favorable for crypto enterprises.
Within the free zone, the DMCC Crypto Centre allows investors to start a crypto-based business. DMCC has created sufficient infrastructure, strict laws, and facilities to facilitate the formation of crypto companies in Dubai. Investors should familiarize themselves with the rules, regulations, and processes for creating a crypto company in the DMCC free-zone before getting started.
Types of Crypto Licenses in Dubai Multi Commodities Centre (DMCC)
To launch a cryptocurrency business, you’ll need a crypto license from the DMCC Free Zone Authority. DMCC currently grants two crypto licenses based on the nature of the company’s activities.
Types of crypto licenses issued by DMCC in Dubai:
- Crypto Trading License
A Crypto trading license is issued to companies that conduct proprietary trading in Crypto commodities. This type of DMCC Crypto license covers the buying and selling of crypto commodities created on distributed ledger technology applications. DMCC will not issue a license to companies that operate a crypto exchange, crypto brokerage services, financial services, banking services, payment processing, or storage services.
- Distributed Ledger Technology Services
The Distributed Ledger Technology Services license allows you to use distributed ledger technologies like blockchain to provide database management solutions and related services. Trading in currencies or cryptocurrencies, establishing an exchange, or offering financial activity services, brokerage, or payment processing are all forbidden for any company that engages in these activities.
Dubai’s Crypto Firms Regulations and Compliance Requirements in 2022
A Memorandum of Understanding (MoU) have been signed by the DMCC and the Securities and Commodities Authority (SCA) to build a regulatory framework for crypto businesses operating in the free zone. As a result, the DMCC will have a solid framework in place by 2022 to sell, issue, list, and trade crypto assets in compliance with SCA rules. Companies wishing to establish a crypto corporation in the DMCC must comply with the following regulations:
- Must prove capital to run the company for at least 6 months
- Compliance with strict KYC regulations
- Companies must comply with the UAE Anti-Money Laundering and Terrorist Financing Act (AML-CFT).
- Ultimate beneficial ownership (UBO) disclosure
How can Xpert Advisory help you obtain a crypto license in the UAE?
Xpert Advisory is an award-winning corporate advisory and consultancy firm comprising professionals who work to ensure you and your business are structured and operating in a complaint manner within the UAE by providing One Stop Solution for companies of all sizes.
Contact us today at aus@xpertadvisory.com
