Virtual assets, nowadays, are the talk and are taking shape all around and many potential investors are joining this new venture march. Irrespective of what is going-on, this type of e-dealing is still embryonic and many are unaware of the necessary details that are of vital importance for any investor. I believe also, non-regulation of the matter in almost all countries is adding flavor to the ambiguity and unclearness surrounding the status of the subject-matter.
Dubai, as usual, took the extra mile and issued a specific regulation to govern “Virtual assets”. Irrespective of other views, this makes a good step to be welcomed as regulations aim to achieve publicity and transparency. By regulation, any matter will be clearly disclosed and each one will know his whereabouts and thus work under the sun.
As per Dubai recent regulation, virtual assets are defined to mean any digital presentation of value that can be digitally valued, transferred or used as an exchange or payment tool or for investment purposes, including virtual tokens and any digital representation of any other value determined by the Authority (the Authority established for taking care of virtual assets).
The “virtual token” referred to means, any digital representation of a set of rights that can be digitally used and traded through a virtual asset platform. The virtual asset platform means, a centralized or decentralized digital platform which is managed by a virtual assets service provider and through which the virtual assets are sold, purchased, offered, issued, safeguarded, cleared and settled through the distributed ledger technology.
We all know “ledger”, however, the “distributed ledger technology” means, a public or private digital database through which transactions carried out on virtual asset are recorded, created, safeguarded and shared so as to provide their authenticity or ownership in a network of set of nodes that automatically spread across multiple locations and places including the “blockchain” technology. In other words, this ledger is using the most recent advanced IT technologies. And, the “virtual assets service provider” means, the authorized person by the Authority to conduct the activity. Herein, this shows that the activity is authorized and, moreover, undertaken by authorized licensed provider.
Also, the new regulation defines the “beneficiary”, which means, the Person who owns the “virtual asset” once it is transferred to his “virtual asset portfolio” and is recorded and validated through the “distributed ledger technology”.
I believe, above terminologies and definitions are commonly used in all instances of “virtual assets”, in other words it is the language of the new business, and therefore, it is very necessary to understand the meaning and concept of virtual assets and likewise to see the possibility of taking part in such new investment deals. Virtual assets, virtual tokens, virtual asset platforms, beneficiaries, virtual assets provider, inter alia, are constituting the language of the new venture which all are obliged to learn by heart while the world is in the process of this new e-digital march.
The Virtual Assets Regulation, in addition to the administrative and corporate issues, also include provisions for technical issues such as the activities to be authorized, conduct of the activity, instances of their waiver, dealings and instances of non-dealings with virtual assets, violations, judicial enforcement, fees and other related matters.
It is important to be aware of the authorized activities and related matters, as per the new Regulation in Dubai. Will be explained in more details separately.
Dr. AbdelGadir Warsama
LEGAL COUNSEL
Email: AWARSAMA@WARSAMALC.COM
