The Dubai Virtual Asset Regulatory Authority, or VARA, has purchased land in the virtual reality world The Sandbox (SAND) as part of its plans to set up a metaverse headquarters.
In a Tuesday announcement from Emirates news agency WAM, VARA said the metaverse entry was aimed at facilitating “collaborative engagement” between virtual asset service providers, international regulatory authorities, and industry leaders. In addition, the Dubai regulator said establishing its “MetaHQ” office could help reach “younger licensees” entering the virtual world.
“By expanding VARA’s resources to a borderless audience through the Metaverse, Dubai is creating a prototype Decentralized Regulator Model, inviting international thought leaders — global authorities, governance custodians and industry shapers — to participate, exchange knowledge and problem-solve collectively so that we enable the dynamic virtual assets sector to build economic resilience, accelerate social inclusion and address environmental sustainability,” said Sheikh Mohammed bin Rashid Al Maktoum, prime minister and ruler of the United Arab Emirates.
— WAM English (@WAMNEWS_ENG) May 3, 2022
Helal Saeed Almarri, director-general of the Dubai World Trade Center Authority, added:
”VARA’s acquiring land in the Sandbox is symbolic of our belief in this sector, and the onus is on us as government to be the bridge that allows investors and consumers to safely adopt, and collaboratively scale the economy. In addition to yielding direct economic benefit and GDP acceleration for Dubai, the VARA sees this as the first step towards shared learning and expertise development across global regulators, so that the international community can benefit from a virtual economy that has been allowed to scale safely and sustainably.”
The move toward the metaverse came less than two months after Sheikh Al Maktoum established VARA and announced a law creating a legal framework for crypto in the Emirate of Dubai. The crypto law will require Dubai residents to register with VARA prior to engaging in crypto-related activities. Penalties for violations may include fines or having business permits suspended or canceled.
Though many companies announced they would be opening offices in the metaverse following Facebook rebranding to Meta in October 2021, VARA is one of the first regulators to do so. On Tuesday, the United States Securities and Exchange Commission said it would expand its division in charge of crypto enforcement by 20 people in an effort to be “better equipped to police wrongdoing in the crypto markets,” but has not signaled a similar move into the metaverse.
Related: Crypto City: Guide to Dubai
As an Emirate within the UAE, Dubai largely has its own laws and regulations, operating several “free zones” where people can incorporate companies and apply for trade licenses. For example, the Dubai Financial Services Authority acted as the financial regulator for the Dubai International Financial Center and introduced its own framework on crypto. Binance CEO Changpeng Zhao also purchased an apartment in the city in October 2021.