In brief
- Animoca Brands has received a VASP licence from VARA to offer broker-dealer and asset management services in Dubai.
- Dubai’s DFSA banned privacy tokens from DIFC-licensed exchanges and tightened its stablecoin definition in January.
- India, the EU, and Hong Kong have moved similarly, restricting or effectively banning privacy coins from regulated markets.
Animoca Brands has obtained a Virtual Asset Service Provider (VASP) licence from Dubai’s Virtual Assets Regulatory Authority (VARA), clearing the way for the Web3 investment giant to offer broker-dealer and asset management services to institutional and qualified investors in and from the emirate.
The licence, announced Monday, authorizes Animoca to operate across the broader emirate of Dubai, excluding the separate Dubai International Financial Centre, and is the latest move by the region to build out regulated infrastructure for digital assets even as it tightens the rules governing how firms operate within it.
“Animoca has seen growth in its institutional products such as RWAs, so an emphasis on institutional clients out of Dubai is important and strategic to us,” Yat Siu, the co-founder and executive chairman of Animoca Brands, told Decrypt.
Animoca Brands, which manages a portfolio of over 600 companies and digital assets and operates platforms including The Sandbox and Moca Network, said the licence strengthens its foothold in the Middle East.
Dubai’s updated framework
The approval lands weeks after Dubai’s DFSA, the separate regulator governing the DIFC financial free zone, prohibited licensed exchanges and financial institutions from facilitating privacy-focused tokens such as Monero and Zcash, citing anti-money laundering and sanctions compliance risks.
The regulator also scrapped its approved token whitelist, placing the burden of ongoing asset suitability assessments squarely on licensed firms themselves.
The updated framework, which came into force last month, prohibits regulated firms from using privacy devices such as mixers, tumblers, or obfuscation tools that hide transaction details.
The DFSA also tightened its definition of “fiat crypto tokens,” reserving the category exclusively for tokens pegged to fiat currencies and backed by high-quality, liquid assets capable of meeting redemption demands during periods of market stress, a standard that would disqualify a major portion of stablecoins currently in circulation.
“Stricter token and AML standards actually make Dubai more attractive for serious global players, because they de-risk the jurisdiction and give institutions the regulatory clarity they need to scale here, Nitesh Mishra, co-founder and CTO of hedging platform ChaiDEX Capital, told Decrypt.
“Banning privacy tokens in DIFC and tightening around mixers and stablecoins is Dubai signalling ‘clean capital only,’ which is exactly what large funds, banks, and listed companies want,” he noted.
Mishra added that VARA and the DFSA are “clearly moving in step with global expectations,” pointing to FATF alignment and sanctions enforcement as front-and-center priorities, while still welcoming builders.
“I’d rather build in a jurisdiction that just got off the FATF grey list and is doubling down on compliant, scalable infrastructure than chase short-term volume in lightly regulated hubs,” he said.
Dubai’s rule changes fit into a wider AML-driven crackdown on privacy tokens and transaction-obscuring tools.
Last month, India’s Financial Intelligence Unit updated its AML/CFT guidelines to require regulated virtual digital asset service providers to block deposits, withdrawals, and trading of privacy tokens, along with coin mixers, citing “unacceptably high” money laundering and terrorist financing risks.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
