The UAE is intensifying efforts to enhance the effectiveness of its regulatory framework for virtual assets (VAs) and virtual asset service providers (VASPs), according to Hamid Al Zaabi, the director-general of the UAE Executive Office of Anti-Money Laundering and Counter Terrorism Financing (EO AMLCTF). Al Zaabi emphasized the country’s commitment to developing a robust virtual asset regulatory framework to attract innovative firms while preventing illicit actors from exploiting the global financial system.
The announcement follows a “Fintech Roundtable” organized by the International Monetary Fund (IMF) in collaboration with the EO AMLCTF, where AML/CFT supervisors from 15 countries and organizations participated. The three-day workshop focused on presenting a draft supervisory methodology for the risk-based supervision of virtual assets and VASPs, developed by IMF staff.
Al Zaabi stated, “We are delighted to partner with the IMF team to give supervisory authorities across the world the opportunity to strengthen international cooperation and be part of the design process of an important new methodology for VA/VASP supervision.”
Chady El Khoury, deputy-division chief of the Financial Integrity Group at the IMF, highlighted the urgent need to address potential money laundering/terrorist financing (ML/TF) risks associated with virtual assets and service providers. The participants emphasized the importance of robust AML/CFT risk-based supervision and identified challenges, including capacity and resource limitations, data collection gaps, and the need for strong collaboration among supervisory agencies.
The UAE has been actively reviewing its AML/CFT progress, demonstrating significant improvement in the first half of 2023. Al Zaabi stressed the robustness and effectiveness of the UAE’s national AML/CFT system, noting the successful confiscation of over Dh1.309 billion from March 2023 to mid-July 2023.
As the UAE continues to refine its regulatory approach, the nation aims to strike a balance by fostering innovation in the virtual asset space while maintaining a vigilant stance against illicit financial activities, reinforcing its commitment to global financial integrity.
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