Digital asset activity continues to develop within the UAE’s regulatory landscape. However, regulatory treatment depends on the nature of the activity, the structure involved, and the applicable jurisdiction. Classification is therefore critical.
Firms considering digital asset activities must clearly define what they intend to do. Are they providing advisory services, arranging transactions, dealing, custody, issuance, or portfolio management? Each activity may carry distinct regulatory implications and approval requirements.
AML risk is often heightened in digital asset contexts due to cross-border flows and pseudonymous structures. Firms must ensure robust client due diligence, screening, monitoring, and escalation procedures aligned to their risk assessment. Transaction monitoring systems should be calibrated to detect unusual activity consistent with the business model.
Investor protection safeguards are also central. Where clients are involved, disclosures should be clear regarding volatility, liquidity, technology risk, and regulatory uncertainty. Documentation should reflect informed consent and understanding.
Governance oversight must extend to digital infrastructure. Wallet controls, custody arrangements, key management procedures, and segregation of assets require structured documentation and monitoring. Risk assessments should address operational resilience and potential system vulnerabilities.
Regulatory engagement should be proactive and transparent where activities evolve. Firms should avoid assumptions regarding permissibility and ensure that classification is confirmed before launch.
VelthRad’s perspective is that innovation and governance must develop together. Digital asset activities can be pursued responsibly when supported by clear classification, structured AML controls, and disciplined oversight.
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Zubin Muriya is a seasoned Governance, Risk, and Compliance (GRC) professional with over two decades of cross-jurisdictional experience in banking regulatory compliance, financial crime risk management, corporate governance framework, and audit advisory. His work across India and the GCC (UAE, Qatar, Bahrain) reflects a career rooted in regulatory rigor and operational integrity.
