Dubai Financial Services Authority has released Consultation Paper 168 seeking feedback on proposed amendments to its regulatory regime for providing financial services in respect of Crypto Tokens in or from the Dubai International Financial Centre. The package would replace the current DFSA-led “recognition” model for Crypto Tokens other than Fiat Crypto Tokens with a framework that makes the relevant Person responsible for determining, on reasonable grounds, whether a Crypto Token is suitable for use for a given activity, supported by new governance, transparency and supervisory reporting expectations. Under the proposals, Persons would need to assess Crypto Tokens against specified criteria including token characteristics and transparency, regulatory status in other jurisdictions, market size and liquidity, technology used, and whether use could prevent compliance with DFSA-administered legislation. Obligations would include maintaining policies and controls, evidencing suitability decisions to the DFSA on request, publishing on a website a list of suitable Crypto Tokens (name, ticker and network), and continuously monitoring suitability with a requirement to stop activities where suitability no longer holds. For Fiat Crypto Tokens, the DFSA would retain responsibility for determining suitability and would publish a Policy Statement setting out assessment criteria and a list of Fiat Crypto Tokens deemed suitable. Further proposals would remove “Recognised Jurisdictions” requirements for Crypto Token business, remove existing thresholds and restrictions on Domestic, External and Foreign Funds investing directly or indirectly in Crypto Tokens (subject to suitability assessment), adjust the definition of a Fund investing in Crypto Tokens to address index-tracking issues, remove key features document requirements where firms arrange or provide custody for Crypto Tokens and Investment Tokens, remove restrictions on how Crypto Tokens contribute to the net asset test for assessed professional client classification, delete the fee for applying to have a Crypto Token recognised, and introduce a monthly Crypto Token information return due within 14 calendar days of month-end and subject to the Fixed Penalty Notice regime. Comments are due by 31 October 2025. Following consultation, the DFSA expects to finalise the draft legislative changes and publish the final Rulebook modules, alongside Supervisory Guidelines for the new suitability framework and the proposed Policy Statement for Fiat Crypto Tokens; a transitional approach is proposed under which existing DFSA-recognised Crypto Tokens (excluding Fiat Crypto Tokens) would be deemed suitable for three months after the commencement date of the new rules.
Dubai Financial Services Authority 2025-10-01
Dubai Financial Services Authority consults on overhauling DIFC crypto token rules with firm-led suitability assessments and monthly reporting
The Dubai Financial Services Authority issued Consultation Paper 168 to seek feedback on proposed changes to its Crypto Token regulatory framework in the Dubai International Financial Centre. The proposals include replacing the recognition model with a framework requiring entities to assess Crypto Token suitability, supported by governance and transparency measures. The DFSA will retain responsibility for assessing Fiat Crypto Tokens and plans to remove certain jurisdictional and investment restrictions, while introducing new reporting obligations.