Dubai’s Virtual Assets Regulatory Authority (VARA) has rapidly established itself as one of the most forward-looking regulators in the global digital asset space.
Over the past few years, the number of VARA-regulated firms has surged, more than doubling year on year. This growth is not accidental. It reflects a deliberate strategy by Dubai to position itself as a trusted, regulated hub for virtual asset service providers (VASPs).
And with growth comes responsibility. As the ecosystem matures, regulatory expectations are rising just as quickly.
A large proportion of VARA-licensed firms operate technically as broker-dealers, offering trading, execution, and intermediary services in digital assets.
The majority of these firms are based in the Dubai World Trade Centre (DWTC) free zone, which is no coincidence.
DWTC is VARA’s home and it also has special license types for businesses working with digital assets.
At the same time, the market itself is evolving. Developments in areas such as stablecoin payments and asset tokenisation are growing and now starting to receive institutional adoption.
As these use cases become more mainstream, the expectation is clear: the sector will continue to expand, and at an accelerating pace.
From the outset, VARA established a rulebook that goes far beyond traditional financial regulation. All licensed VASPs must comply with strict requirements covering client asset protection, governance, cybersecurity, and operational resilience.
While cyber risk is a priority for all major regulators including VARA, it carries particular importance for VASPs, whose entire business model tends to be inherently digital.
This reflects a simple reality: in digital assets, technology risk is business risk.
From our experience working with regulated financial firms across the UAE and Switzerland, there are clear differences between VARA and more traditional regulators such as the DFSA and FSRA.
DFSA and FSRA follow well-established frameworks. They focus on governance, risk management, and controls around systems and data.
VARA builds on these foundations but goes further in several areas:
This includes the requirement to appoint a Chief Information Security Officer (CISO) with responsibility for cybersecurity and technology risk. This role must be separate from the Compliance Officer role, although it may also cover data protection responsibilities and act as a DPO.
In practice, while many firms can outsource compliance functions, they still need dedicated cybersecurity leadership. This creates a gap for specialised expertise, particularly for firms that do not have the scale to build these capabilities in-house.
For firms looking to obtain or maintain a VARA licence, compliance is not a one-off exercise. It is an ongoing operational commitment.
From an IT and security perspective, several priorities stand out:
1. Strong governance and accountability
Firms must define clear ownership of cybersecurity, supported by policies that are aligned with VARA requirements.
2. Secure infrastructure by design
Public cloud environments can create challenges around control, data residency, and auditability. Many firms are moving towards private or hybrid cloud environments to retain full control over their data and systems.
3. Advanced monitoring and threat detection
Continuous monitoring, supported by a Security Operations Centre, is essential to detect and respond to threats in real time.
4. Key and wallet management controls
Secure handling of cryptographic keys is critical. This includes segregation, access control, and lifecycle management.
5. Testing and resilience
Regular penetration testing, vulnerability assessments, and disaster recovery planning are required to demonstrate operational resilience.
6. Continuous compliance
Regulatory compliance must be embedded into daily operations, with ongoing reporting, audits, and control validation.
The firms that succeed in this environment are not those that treat compliance as a checkbox. They are the ones that build secure, resilient, and compliant IT environments from the ground up.
This is where the right IT and compliance approach makes the difference.
At Penta, we work with financial institutions and regulated firms operating under frameworks such as VARA, DFSA, FSRA, FINMA, and others.
Our focus is simple: helping firms meet and maintain regulatory requirements around cybersecurity, IT governance, and operational resilience.
Whether you are applying for a VARA licence or already regulated, this typically involves:
We support both new entrants and established firms by acting as an extension of their internal teams, providing the expertise needed to meet these requirements in a practical and sustainable way.
The rapid expansion of VARA is just the beginning.
As digital assets become more institutionalised, regulatory scrutiny will increase. Firms will need to demonstrate not only innovation, but trust, resilience, and control.
Those that invest early in the right IT foundations will be best positioned to scale.
If you are planning to obtain a VARA licence, or want to strengthen your IT security and compliance posture, we can help. Speak to us to discuss how to build a secure, compliant, and future-ready IT environment.