The Central Bank of the United Arab Emirates (CBUAE) has recently announced penalties for VASPs. In this respect, the agency has collaborated with some other regulators operating within the country and published exclusive guidance for virtual asset service providers (VASPs). The latest guidelines take into account the VASPs that are operating within the jurisdiction of the UAE without any adequate licenses.
UAE’s Central Bank Issues New Guidelines for VASPs to Penalize Unregistered Entities
The central bank took to X to share the news regarding this development. It noted in its recent post that the agency has collaborated with the UAE supervisors. The National Anti-Money Laundering and Combating Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC) also cooperated with it. In this way, the mutual guidance concerning the stoppage of the unregistered VASPs witnessed their issuance.
On 6 November, the CBUAE and the NAMLCFTC issued a list containing “Red Flags” in the case of VASPs. The respective list took into account a deficiency in the regulatory license and a lack of regulatory disclosures. In addition to this, it also dealt with poor communications, unrealistic promises, and other indicators to detect suspicious parties.
The latest guidance focuses on licensed financial institutions (LFIs), licensed VASPs, and designated non-financial businesses and professionals (DNFBPs). In line with the guidance, the supervisory authorities anticipate the above-mentioned entities to report transfers that suspicious parties carry out. The guidance noted that the UAE-based VASPs without any valid registration will go through criminal and civil penalties.
Penalties May Target Unlicensed Entities, Their Senior Managers, and Owners
The respective penalties are taken into account but are not restricted to senior managers, owners, and entity-related financial sanctions. Moreover, the guidelines also disclosed that licensed VASPs, DNFBPs, and LFIs will also go through law enforcement-related actions. As per the CBUAE’s governor “Khale Mohamed Balama,” the exclusive guidance takes place at the moment when crypto assets have gained considerable accessibility.
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