New “crypto token regime” instituted at Dubai International Financial Center

The emirate's free trade zone has its own legal system and courts. Now, its crypto regulations have been increased and extended to all recognized tokens in the zone.

Dubai Financial Services Authority (DFSA) announced on November 1 that its crypto token regime came into effect in the Dubai International Financial Center (DIFC) Special Economic Zone, with a transition period of six months. The new regime is the second set of DFSA regulations, building on the “Investment Token Regulation” introduced at DIFC in October 2021.

The #DFSA has issued #CryptoToken regulations for clients wishing to use this new asset class.

This expands the range of virtual asset schemes available at the Center, building on the #InvestmentTokens regulations announced in October 2021. pic.twitter.com/OJX7frlVqc

Crypto tokens means any token in addition to previously defined investment tokens, except utility tokens, non-fungible tokens, central bank digital currencies, privacy tokens, and algorithmic tokens. Tokens must be recognized by the DFSA for use in the DIFC, following an established application process. Stablecoins, or "fiat crypto tokens", are subject to additional requirements.

The new regime addresses the fight against money laundering and terrorist financing, as well as consumer protection, market integrity, custody and the financial resources of service providers. The regulations were first outlined in a consultative document in March. This document has been subject to a lengthy comment process.

DFSA Chief Executive Ian Johnston said:

“Our work to develop a comprehensive crypto token regime took into account feedback from...