UAE issues new guidance to tackle unlicensed virtual asset service providers

UAE issues new guidance to tackle unlicensed virtual asset service providers

The guidance provides the reporting entities with a comprehensive roadmap to enhancing their governance and operational processes. Reporting entities include LFIs, Designated Non-Financial Businesses and Professions (DNFBPs), and licenced VASPs.

It provides detailed information on how firms can identify and address governance challenges and emerging risks. It underlinethe importance of compliance with regulatory obligations under AML legislation and the regulations, instructions, guidelines, notices, and rules issued by the Supervisory Authorities.

The new guidance directs reporting entities to consult the FATF Report on Red Flag Indicators of Money Laundering and Terrorist Financing regarding Virtual Assets.

They must watch for unlicensed VASPs' fraud, manage money laundering, terrorism financing risks, address emerging threats in assessments, and perform due diligence to detect fake documents and sanctions evasion, said NAMLCFTC - the issuing authority.

Khaled Mohamed Balama, Governor of the CBUAE and Chairman of the NAMLCFTC, said, “The new guidance on combating the use of unlicensed virtual asset service providers comes at a time when virtual assets become more accessible through digital channels."

He added, "As our digital economy matures, our work on combating all kinds of financial crimes intensifies through raising awareness of their risks and emphasising the importance of compliance with relevant regulations and legislation to ensure the