VARA Transfer and Settlement Services: What you Need to Know

The Dubai Virtual Assets Regulatory Authority (“VARA”) serves as the dedicated regulator overseeing Virtual Asset Service Providers (“VASPs”) across Dubai. Its mandate is to create a secure, transparent, and sustainable environment for virtual asset activities, ensuring that innovation is balanced with investor protection and financial stability.

Among VARA’s regulated activities, Transfer and Settlement Services are among the most sensitive because they involve the actual movement of client virtual assets. VARA treats these services with special caution to ensure accuracy, asset protection, and market stability.

1. When Do You Need a Transfer and Settlement Services License?

VASPs must obtain the Transfer and Settlement Services License whenever it is responsible for transmitting, transferring, or settling Virtual Assets between entities, or between any wallets, accounts, addresses, or locations on behalf of a client.

It is worth mentioning that, as of today, no VASPs have yet been licensed for Transfer and Settlement Services by VARA.

2. Core Regulatory Expectations for Transfer & Settlement VASPs

Compliance With UAE Legal and Regulatory Requirements

Because transfer and settlement involve the actual movement of value, VARA requires VASPs to adhere not only to its own framework but also to the UAE’s wider financial regulations. This includes compliance with:

In practice, such compliance means a VASP must ensure every transfer is lawful, traceable, and executable across the entire route from sender to recipient.

Protecting Clients and Their Assets

a) Client Consent and Authorization: A VASP cannot move, submit, or handle any client virtual assets without explicit prior consent from the client.

VARA also allows clients to request transaction-level authorization, meaning the VASP must obtain specific approval for each individual transfer where required.

b) Clear Disclosure of Risks and Service Terms: Clients must understand exactly what they are agreeing to. Before any transfer or settlement is initiated, the VASP must explain:

Transparency is a core expectation: clients must have a full picture before proceeding.

Error Handling and Liability: If a VASP submits a transfer in error or without proper authorization, it must correct the issue or refund the client within 24 hours and is responsible for losses arising from its own actions.

When acting for a sender, the VASP is accountable for ensuring the transfer reaches the intended recipient, whereas, when acting for a recipient, the VASP must maintain readiness of the receiving wallet and ensure all routing details are correct.

All client instructions must be documented and retained for eight years.

Facilitating Transfers Involving Exchanges

When a transfer involves an exchange or requires conversion, VARA permits VASPs to interact only with VARA-licensed exchange providers, or foreign exchanges that VARA has explicitly approved.

The VASP must act in the client’s best interest and clearly explain how any conversion will occur, including the role of third-party parties, pricing methodology, and all applicable fees.

Immediately after initiating a transfer or settlement, the VASP must issue a receipt confirming:

This receipt becomes part of the VASP’s regulatory record and must be preserved for eight years.

What Happens When a Client Defaults?

Even with the best systems in place, transfers may fail or a client may be unable to meet their obligations. For these situations, VARA requires every VASP to maintain clear and enforceable default management rules. These rules must explain how the VASP may close out a client’s positions, apply any liquidation proceeds, determine the remaining rights and liabilities, and manage the segregation or portability of a client’s assets. They must also ensure that the VASP’s own solvency is protected at all times.

What about capital requirements?

VASPs must maintain a minimum of AED 500,000 or 25% of its fixed annual overheads. This threshold ensures the VASP has sufficient financial resources to operate securely, cover operational costs, and meet obligations to clients.

VARA requires all VASPs to maintain their paid-up capital in secure, regulator-approved forms. At all times, the capital must be held in one of the following ways: Capital must be maintained in a VARA-approved form such as a UAE bank trust account, a surety bond, or another arrangement approved by the regulator.

What about the fees?

As for the related VARA fees for obtaining the Transfer and Settlement Services, the VASP must pay a license application fee of AED 40,000 and an annual supervision fee of AED 80,000 payable in advance for this licensed activity.

How Rasma Legal Can Support You

Rasma Legal helps businesses navigate every stage of the VARA licensing and compliance journey. Our team has successfully worked with VARA across multiple licensing categories and understands the practical and regulatory requirements for operating in Dubai’s fast-evolving digital or crypto asset market. Whether you are applying for a VARA license or strengthening your ongoing compliance, we provide the strategic guidance and hands-on support you need to build a secure, compliant, and scalable VA business.