Glossary A – C
AML – Anti-Money Laundering
The framework of laws, regulations, and systems designed to prevent money laundering. In the UAE, the core law is Federal Decree-Law No. 20/2018. Applies fully to VASPs.
Approved Person (VARA)
An individual holding a controlled function (e.g., CEO, COO, Compliance Officer, MLRO) who must meet fit-and-proper standards.
Authority (Federal)
Refers to the Securities and Commodities Authority (SCA), the main federal regulator responsible for VAs outside financial free zones.
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CDD – Customer Due Diligence
The standard process of identifying and verifying customers before providing regulated services. Required under UAE AML law and VARA rulebooks.
Central Bank (CBUAE)
UAE’s regulator responsible for:
- Payment tokens
- Stored Value Facilities
- Financial system stability
Some VA activities require coordination with the Central Bank.
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CFT – Countering the Financing of Terrorism
Regulatory measures designed to prevent the financing of terrorist activity. Always paired with AML obligations.
Client Asset Rules (VARA)
Rules governing segregation, custody, safeguarding, and reconciliation of client virtual assets and client money.
Compliance & Risk Management Function (VARA)
A required internal function responsible for regulatory compliance, AML/CFT, monitoring, and risk governance.
D – F
DLT – Distributed Ledger Technology
A public or private digital database (e.g., blockchain) that records and validates VA transactions across multiple network nodes.
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Digital Securities
Tokenized representations of equity, debt, or other financial instruments.
Regulated by SCA/DFSA/FSRA, not VARA.
Excluded from the federal VA definition.
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EDD – Enhanced Due Diligence
Extra level of diligence applied to high-risk customers or jurisdictions (PEPs, sanctions exposure, etc.). Required under AML law.
Exchange (Virtual Asset Exchange) (VARA)
A platform on which VAs can be traded, swapped, or exchanged. Typically falls under VARA’s VA Exchange activity.
Financial Free Zones (FFZ)
Special jurisdictions such as DIFC and ADGM with independent regulators.
The VARA’s Cabinet Decision does not apply to them.
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FIU — Financial Intelligence Unit
The UAE FIU is the national authority responsible for:
- Receiving STRs, SARs, and other AML reports
- Analyzing financial intelligence
- Sharing information with law enforcement or international bodies
All reporting to the FIU is done electronically through goAML.
G – L
GoAML
goAML is the UAE’s official digital platform used by all obliged entities (banks, DNFBPs, VASPs) to submit:
- Other AML filings required by the FIU
- STRs
- SARs
- CBML reports
- Terrorist financing reports
- High-Risk Country reports
- Other AML filings required by the FIU
It is mandatory for all VASPs to register on goAML before starting operations.
Initial Approval (IA) – VARA
The first stage before obtaining a Minimal Viable Product (MVP) or Full Market Product (FMP) license.
Issuer
A natural or legal person issuing a virtual asset.
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KYC – Know Your Customer
The practical operational steps to perform CDD: collecting IDs, screening customers, understanding activity.
Lending & Borrowing Services (VARA)
Services that allow customers to lend or borrow VAs or use VA collateral (e.g., staking, credit lines).
LLA – Local Licensing Authority
Emirate-level regulator empowered to license VASPs locally.
In Dubai, VARA is the LLA.
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M – P
Market Conduct Rules (VARA)
Rules governing fair dealing, trading behaviour, manipulation prevention, transparency, and conflicts of interest.
MLRO – Money Laundering Reporting Officer
Mandatory role within every VASP; responsible for AML compliance and STR filing.
MVP – Minimum Viable Product Licence (VARA)
Interim licensing stage allowing limited operations prior to receiving a Full Market Product (FMP) licence.
PEP – Politically Exposed Person
Customers holding public or senior government roles requiring EDD.
Platform Operator / Virtual Asset Platform Operator
A legal person licensed to operate trading, listing, clearing, or settlement of VAs.
Federal definition: provides trading, listing, storage, or settlement services via DLT.
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Public Private Key Infrastructure
Cryptographic tech used for wallet operations, custody, and user authentication.
Q – S
SAR — Suspicious Activity Report
A Suspicious Activity Report is similar to an STR but focuses on behaviour or patterns that appear suspicious, even if no financial transaction has occurred or if the amounts are small.
Examples include:
- Unusual customer behaviour
- Attempts to avoid KYC
- Suspicious inquiries or structuring attempts
Some jurisdictions distinguish STR vs SAR; in the UAE, both are filed through goAML.
SCA – Securities and Commodities Authority
Federal regulator responsible for:
- Virtual asset activities at federal level
- Licensing VASPs (unless delegated to LLAs)
- AML/CFT oversight
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Security Token
A digital representation of a security. Regulated outside VARA (SCA, DFSA, FSRA).
Stablecoin
A token pegged to fiat or commodities.
If fiat-pegged for payment, may fall under Central Bank.
If used only for investment, may fall under VARA with Central Bank approval.
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STR – Suspicious Transaction Report
Mandatory filing to the UAE FIU for any suspected ML/TF activity.
Stored Value Facility (SVF)
A non-cash electronic payment facility regulated by the Central Bank.
Explicitly excluded from the VA definition.
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T – V
Technology and Information Security Rules (VARA)
Mandated requirements for cybersecurity, operational resilience, penetration testing, and data security.
Tokenization
The process of converting rights or assets into digital tokens.
Travel Rule
A FATF requirement mandating that VASPs exchange originator and beneficiary information for VA transfers.
VA – Virtual Asset
A digital representation of value tradable or transferable electronically and usable for investment purposes.
Federal definition excludes:
- Digital fiat
- Digital securities
- Payment tokens (unless approved)
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VASP – Virtual Asset Service Provider
Any legal entity conducting VA activities including:
- Exchange
- Transfer
- Brokerage
- Custody
- Issuance
- Platform operation
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Virtual Asset Activities
Regulated activities including:
- Platform operation
- Exchange
- Transfer
- Brokerage
- Custody
- Financial services relating to VA offerings
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VARA – Virtual Assets Regulatory Authority (Dubai)
Dubai’s dedicated VA regulator created by Dubai Law No. 4 of 2022.
Acts as the LLA for the Emirate and issues detailed rulebooks.
W – Z
Wallet Provider
A VASP providing digital wallets for custody, transfer, and storage of VAs.
Whitelist / Sanctions Screening
Required AML process of screening customers against domestic UAE lists, UN lists, and international sanctions authorities.
