What Virtual Asset Service Providers Need to Know
When it comes to operating in Dubai’s regulated virtual asset sector, the Virtual Assets Regulatory Authority (VARA) maintains a clear focus on robust governance, risk management, and compliance. One particular requirement often overlooked until the licensing stage can make a significant difference in whether your application proceeds smoothly or stalls: the third-party attestation of your compliance and risk management policies.
Under Rule III.B.4 of the VARA Compliance and Risk Management Rulebook, all policies and procedures established pursuant to Rule III.B.1 must:
“…be attested by a competent third party and shall be submitted to VARA in the licensing process.”
This is not just a formality, it is a safeguard designed to ensure that Virtual Asset Service Providers (VASPs) are building operational frameworks that genuinely meet VARA’s high standards for compliance and risk control.
Understanding the VARA Requirements
Rule III.B.1 obliges VASPs to establish and implement a full suite of compliance and risk management policies covering areas such as:
- Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) controls
- Customer due diligence and onboarding processes
- Transaction monitoring and suspicious activity reporting
- Cybersecurity measures
- Business continuity and incident response
- Governance and oversight structures
Under Rule III.B.4, these policies are not just to be drafted internally; they must be verified by a competent third party before being submitted to VARA.
This attestation acts as an independent confirmation that the policies are:
- Fit for purpose
- Comprehensive in scope
- Aligned with VARA’s regulatory framework and UAE laws
- Practically implementable in the VASP’s operational context
Who Qualifies as a “Competent Third Party”?
While VARA does not explicitly define the term in the rule itself, a competent third party would generally mean:
- A licensed audit, legal, or compliance consultancy firm with relevant sector expertise
- A firm or individual independent from the applicant (no conflict of interest)
- Someone with demonstrable experience in UAE regulatory compliance, particularly VARA and virtual asset frameworks
The attestation typically involves a thorough review and gap analysis of your drafted policies against VARA’s requirements, best practices in virtual asset compliance, and relevant UAE federal laws.
Why This Matters for Licensing
During the licensing process, VARA’s evaluation of your application will hinge not only on the completeness of your documents but on their quality and credibility. By requiring third-party attestation:
- VARA gains assurance that your internal policies are more than just “tick-the-box” documents.
- It reduces the risk of operational or compliance failures post-licensing.
- It promotes higher industry standards by ensuring expert review at the outset.
Failing to meet this requirement or submitting policies without proper attestation can delay your licensing approval and potentially trigger additional review rounds.
Practical Steps for VASPs
If you are preparing your application:
- Engage a Third-Party Early – Don’t wait until the final submission deadline; the review process can take time, especially if revisions are needed.
- Provide Full Operational Context – The attesting party will need to understand your business model, products, customer base, and risk profile to give an informed opinion.
- Close Identified Gaps Promptly – If your third-party reviewer flags deficiencies, address them immediately to avoid back-and-forth during the licensing phase.
- Document the Review Process – Keep records of the attestation, correspondence, and any remedial actions taken it may be useful in future inspections or renewals.
The Bottom Line
Rule III.B.4 is more than a regulatory formality, it’s a quality checkpoint that ensures VASPs entering Dubai’s virtual asset ecosystem are equipped with robust, credible, and operationally sound compliance frameworks.
For businesses aiming to thrive in this highly regulated space, treating the third-party attestation process as an opportunity rather than a hurdle can make all the difference. It’s your chance to strengthen your internal governance, gain valuable external insights, and demonstrate to VARA that you are not only ready for licensing, but ready for long-term compliance success.
Contact Affiniax for VARA’s third party attestations today!
