Getting a crypto license in Dubai isn’t just about filling out forms. If you’re trying to run a crypto business there in 2025, you’re dealing with one of the strictest, most detailed regulatory systems in the world. The VARA (Virtual Assets Regulatory Authority) doesn’t just want your money-it wants proof you can handle it responsibly. And they’ve made it crystal clear: no shortcuts, no loopholes, no anonymous transactions.
What VARA Actually Regulates
VARA isn’t just watching Bitcoin and Ethereum. Since 2022, it’s been the only body in Dubai (outside DIFC) that can legally approve any business dealing with virtual assets. That includes exchanges, wallet providers, custodians, NFT marketplaces, DeFi platforms, and even companies issuing tokens. If you’re moving, storing, trading, or selling digital assets to anyone in Dubai, you need VARA’s stamp.There are six main types of services that require a license:
- Exchange services - Platforms where users trade crypto for crypto or fiat.
- Broker-dealer services - Buying or selling crypto on behalf of clients, whether with USD, AED, or other crypto.
- Custody services - Holding clients’ crypto for them. This comes with heavy security rules.
- Transfer services - Moving crypto between wallets or accounts on behalf of users.
- Wallet provision - Offering digital wallets to customers, not just internal ones.
- Token issuance - Creating new tokens. Category 1 needs direct VARA approval per token. Category 2 must go through a licensed intermediary.
Even if you think you’re just running a simple NFT marketplace or a DeFi lending app, VARA likely considers you a VASP (Virtual Asset Service Provider). And if you’re not licensed? You’re operating illegally.
How Much Money Do You Need?
VARA doesn’t play around with capital. You can’t just open a bank account and call it a day. You need real, liquid, paid-up capital-and it adds up fast.Minimums start at AED 100,000 (about $27,000) for basic services. But if you’re offering multiple services, the numbers stack:
- Broker-dealer service: AED 1 million ($272,000)
- Custody service: AED 4 million ($1.09 million)
- Exchange service: AED 5 million ($1.36 million)
So if you want to run an exchange and custody service? You need AED 9 million ($2.45 million) in capital. That’s not a suggestion. That’s a hard requirement. VARA checks bank statements and financial audits before approving anything.
And don’t assume you can use crypto as capital. It has to be in fiat-AED, USD, EUR-held in a regulated bank account. No exceptions.
Costs Beyond Capital
The capital is just the start. There are fees on top of that:- Application fee: AED 40,000 to AED 100,000, depending on how complex your business model is.
- Annual supervision fee: Between AED 80,000 and AED 200,000. This pays for VARA’s audits, monitoring, and compliance checks.
- Legal and tech costs: Most companies spend another AED 200,000-500,000 on lawyers, compliance software, cybersecurity setup, and internal training.
Some firms spend over AED 1 million in the first year just to get compliant. It’s not cheap. But for many, it’s worth it-Dubai’s global reputation and zero income tax make the investment pay off long-term.
Who Can Run the Company?
VARA doesn’t just check your bank account. They check your people.Every board member, CEO, compliance officer, and key technical lead must pass a “fit and proper” test. That means:
- No criminal record, especially around fraud or money laundering.
- No history of being banned from financial services anywhere in the world.
- Proven experience in crypto, finance, or tech-no amateur operators.
They’ll ask for CVs, references, and even interviews. If your CFO was fired from a crypto firm in Singapore for failing KYC checks? That’s a red flag. VARA has access to global databases. They’ll find out.
Anti-Money Laundering Rules Are Non-Negotiable
This is where most applicants fail.VARA demands a full AML/CFT system that meets FATF standards. That means:
- Automated KYC - You need software that verifies IDs, checks addresses, and confirms source of funds. No manual uploads. No exceptions.
- Transaction monitoring - Every transfer over AED 10,000 must be flagged and logged. Suspicious patterns trigger automatic alerts.
- Suspicious activity reports - You must file these with VARA within 24 hours if you spot anything odd.
- Beneficial ownership disclosure - If your company is owned by a shell corporation in the Caymans? VARA will demand the real names behind it.
And yes-they test your system. They’ll send fake transactions to see if your software catches them. If it doesn’t, your application gets rejected.
What’s Banned? (And Why)
VARA doesn’t just regulate-it blocks. Certain assets are outright prohibited:- Privacy coins - Monero (XMR), Zcash (ZEC), and similar coins that hide transaction details are banned. Why? Because they can’t be traced. VARA won’t allow anonymity on its soil.
- Unapproved marketing - You can’t run ads, TikTok videos, or influencer campaigns without VARA’s written approval. All promotional material must be clear, factual, and include risk warnings.
- Unsecured wallets - Cold storage isn’t optional. If you’re holding client assets, you need multi-sig, hardware wallets, and insurance.
One company got rejected in 2024 because their website said “100% anonymous trading.” That phrase alone triggered an automatic denial. VARA doesn’t tolerate misleading language.
Technology and Security Requirements
Your tech stack isn’t just a tool-it’s part of your license.VARA requires:
- ISO 27001 or equivalent cybersecurity certification.
- Regular third-party penetration tests (at least twice a year).
- Encryption for all data at rest and in transit.
- Backups stored in Dubai or approved jurisdictions.
- System uptime guarantees of 99.9% for critical services like exchanges.
They’ll send auditors to your server rooms. They’ll ask for logs from your trading engine. They’ll check if your developers use secure coding practices. If your system was built by a freelancer on Upwork? That’s a problem.
Where VARA Fits in Dubai’s Bigger Picture
Dubai isn’t the only place in the UAE with crypto rules. The DIFC has its own regulator, DFSA. Abu Dhabi has FSRA. And the federal SCA covers the rest of the country.But VARA is the only one focused entirely on virtual assets. It’s designed for speed, clarity, and global appeal. If you’re targeting institutional investors, hedge funds, or international crypto firms, VARA’s license is the gold standard.
That said-don’t assume one license covers you everywhere. If you’re operating across multiple emirates, you might need more than one. VARA only covers Dubai. DFSA covers DIFC. You can’t use one to serve both.
What Happens If You Skip the License?
You might think you can fly under the radar. You can’t.VARA works with banks, payment processors, and telecom providers. If you’re accepting AED payments or using local cloud services without a license, your accounts will be frozen. Your domain might be blocked. Your staff could face fines or even criminal charges.
One crypto startup tried to operate without a license in 2023. They were shut down in 11 days. The founder was barred from entering the UAE for five years. The company’s assets were seized.
How to Get Started
If you’re serious about applying:- Set up a legal entity in Dubai (LLC or free zone company).
- Secure your capital in a regulated bank.
- Hire a local compliance consultant with VARA experience.
- Build your AML system with certified software (e.g., ComplyAdvantage, Chainalysis).
- Submit your application through VARA’s online portal-no paper forms.
- Expect 3-6 months for review. Don’t rush it.
Companies that hire the right advisors and prepare thoroughly often get approved in under four months. Those that try to cut corners? They get stuck in a loop of requests, delays, and rejections.
What’s Next for VARA?
The rules aren’t static. In 2025, VARA is expanding into:- AI-driven risk monitoring for trading platforms.
- Environmental impact assessments for mining and energy-heavy operations.
- Guidelines for DAOs (decentralized autonomous organizations).
- Integration with the UAE’s central bank digital currency (CBDC) pilot.
If you’re building something new, assume VARA will regulate it. They’re not waiting for trends-they’re setting them.
Do I need a VARA license if I’m just trading crypto for myself?
No. VARA only regulates businesses offering services to others. If you’re trading crypto as an individual, with no clients, no platform, and no fees, you don’t need a license. But if you’re running a wallet, exchange, or advisory service-even if it’s just for friends-you’re a VASP and you need VARA approval.
Can I use a foreign company to avoid VARA rules?
No. If your service is accessible to users in Dubai, VARA considers you operating within its jurisdiction-even if your company is registered in Singapore or the Caymans. They’ve blocked websites, frozen bank accounts, and fined foreign firms for this. You can’t outsource your compliance.
Is there a fast-track option for startups?
No. VARA doesn’t have a fast-track program. But they do offer pre-application consultations. If you book one, you’ll get feedback on your application before you submit. This reduces the chance of rejection. Most successful applicants use this step.
What happens if my license is revoked?
Your business must immediately stop all virtual asset activities. You’ll have 30 days to wind down operations, return client assets, and submit a closure report. Failure to comply can lead to fines, criminal charges, or a ban from reapplying for up to five years. Revocation is rare-but it’s final.
Can I apply for multiple services at once?
Yes. VARA allows you to apply for multiple service categories in one application. But your capital requirements are cumulative. If you apply for exchange, custody, and broker-dealer services, you’ll need the full AED 10 million in paid-up capital. It’s more efficient than applying separately, but more expensive upfront.
Comments (1)
Ritu Singh
January 8, 2026 AT 17:58 PMSo let me get this right... Dubai wants to control crypto like it's the 1980s Soviet Union but calls it innovation? They ban privacy coins because they can't spy on you? Welcome to the new world order where freedom is a loophole they're busy patching with AED 10 million security deposits. They're not regulating crypto they're burying it under bureaucracy and calling it a gold standard. I'm not surprised the CIA has a branch in Dubai now.