Dubai’s new virtual asset law can become a global model for governments and central banks to regulate cryptocurrency and protect investors while also boosting economic growth and innovation, the co-founder of blockchain data platform Chainalysis said.
“There's lots of environments and conversations happening internationally about creating a best-in-class approach to the asset class and there's really an opportunity for Dubai to take a lead in that,” Jonathan Levin, who is in Dubai to speak at this week’s World Government Summit, told The National.
“As [Dubai] goes into implementation and building the regulatory environment for crypto businesses to operate, it has the potential to become a model of how this regulation of the sector should be performed," said Mr Levin, who is also the chief strategy officer at Chainalysis.
“It will allow for a much more tangible example that people can look to as a regulatory architecture for the industry … and gets the balance right between economic growth, encouraging innovation behind the sector and protecting investors and public safety.”
This month, Dubai adopted the Dubai Virtual Asset Regulation Law, which aims to create an advanced legal framework to protect investors and provide international standards for virtual asset industry governance that promotes responsible business growth in the emirate.
Dubai also established the Virtual Asset Regulatory Authority (VARA) as an “independent authority” to regulate the sector throughout the emirate, including special development zones and free zones, but excluding the Dubai International Financial Centre.
The authority, which will also be responsible for licensing, has legal and financial autonomy over the virtual asset sector, which includes cryptocurrencies such as Bitcoin and non-fungible tokens, and will be linked to the Dubai World Trade Centre Authority (DWTCA).
Central banks around the world have been reluctant to endorse cryptocurrencies because of their high volatility, speculative nature, use for illicit activities, as well as the lack of value and regulatory oversight.
The Central Bank of the UAE also does not recognise cryptocurrencies as legal tender.
The Middle East received $271.7 billion worth of cryptocurrency between July 2020 and June 2021, which represents 6.6 per cent of global activity, according to Chainalysis data.
The region is one of the fastest-growing markets in the world. Turkey has the highest transaction volume at $132.4bn from July 2020 to June 2021. The UAE is in third place, trailing Turkey and Lebanon, with a transaction volume of $25.5bn.
New York-based Chainalysis, which Mr Levin founded with chief executive Michael Gronager in 2014, works with government agencies, exchanges, financial institutions, and insurance and cyber security companies in more than 60 countries. The company provides them with data and market intelligence software that is used to help solve some of the world’s biggest financial crimes.
These crimes include the DarkSide ransomware attack on Colonial Pipeline in May last year, in which the operator of the American oil pipeline system paid 75 Bitcoin to regain control of the system.
In June last year, the US Department of Justice managed to recover part of the ransom paid by Colonial Pipeline – 63.7 Bitcoin valued at about $2.3 million – by gaining access to DarkSide’s systems, it said in a statement.
Cryptocurrency-based crime hit a high in 2021, with illicit addresses receiving $14bn over the course of the year, up from $7.8bn in 2020, according to Chainalysis’ 2022 Crypto Crime Report.
However, those numbers do not reflect the “full story”, the report said.
Across all cryptocurrencies tracked by Chainalysis, the total transaction volume surged to $15.8 trillion in 2021, up 567 per cent compared with the previous year.
“Given that roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency,” Chainalysis said in the report.
“But the fact that the increase in illicit transaction volume was just 79 per cent – nearly an order of magnitude lower than overall adoption – might be the biggest surprise of all,” it said.
All of that becomes a more sophisticated financial system that actually can help broaden the adoption and power general financial instruments beyond what we've typically considered to be the cryptocurrency industry
Jonathan Levin,
co-founder of Chainalysis
“With the growth of legitimate cryptocurrency usage far outpacing the growth of criminal usage, illicit activity’s share of cryptocurrency transaction volume has never been lower.”
The future of the cryptocurrency sector lies in the widespread adoption of digital coins and the “financialisation” of the asset class, Mr Levin said.
This would entail more sophisticated financial products – such as offering interest on cryptocurrency deposits or borrowing against cryptocurrency deposits – being offered to consumers, he said.
“All of that becomes a more sophisticated financial system that actually can help broaden the adoption and power general financial instruments beyond what we've typically considered to be the cryptocurrency industry."
However, the financialisation of the industry would take time, Mr Levin said.
“It's affecting the lives of hundreds of millions of people at this point, but not like billions of people. We need to get to the point where there are billions of people that are actually accessing crypto technology in their lives [for this to happen].”
Six tips to secure your smart home
Most smart home devices are controlled via the owner's smartphone. Therefore, if you are using public wi-fi on your phone, always use a VPN (virtual private network) that offers strong security features and anonymises your internet connection.
Keep your smart home devices’ software up-to-date. Device makers often send regular updates - follow them without fail as they could provide protection from a new security risk.
Use two-factor authentication so that in addition to a password, your identity is authenticated by a second sign-in step like a code sent to your mobile number.
Set up a separate guest network for acquaintances and visitors to ensure the privacy of your IoT devices’ network.
Change the default privacy and security settings of your IoT devices to take extra steps to secure yourself and your home.
Always give your router a unique name, replacing the one generated by the manufacturer, to ensure a hacker cannot ascertain its make or model number.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Biog
Mr Kandhari is legally authorised to conduct marriages in the gurdwara
He has officiated weddings of Sikhs and people of different faiths from Malaysia, Sri Lanka, Russia, the US and Canada
Father of two sons, grandfather of six
Plays golf once a week
Enjoys trying new holiday destinations with his wife and family
Walks for an hour every morning
Completed a Bachelor of Commerce degree in Loyola College, Chennai, India
2019 is a milestone because he completes 50 years in business
Planes grounded by coronavirus
British Airways: Cancels all direct flights to and from mainland China
Hong Kong-based Cathay Pacific: Cutting capacity to/from mainland China by 50 per cent from Jan. 30
Chicago-based United Airlines: Reducing flights to Beijing, Shanghai, and Hong Kong
Ai Seoul: Suspended all flights to China
Finnair: Suspending flights to Nanjing and Beijing Daxing until the end of March
Indonesia's Lion Air: Suspending all flights to China from February
South Korea's Asiana Airlines, Jeju Air and Jin Air: Suspend all flights
Get inspired
Here are a couple of Valentine’s Day food products that may or may not go the distance (but have got the internet talking anyway).
Sourdough sentiments: Marks & Spencer in the United Kingdom has introduced a slow-baked sourdough loaf dusted with flour to spell out I (heart) you, at £2 (Dh9.5). While it’s not available in the UAE, there’s nothing to stop you taking the idea and creating your own message of love, stencilled on breakfast-inbed toast.
Crisps playing cupid: Crisp company Tyrells has added a spicy addition to its range for Valentine’s Day. The brand describes the new honey and chilli flavour on Twitter as: “A tenderly bracing duo of the tantalising tingle of chilli with sweet and sticky honey. A helping hand to get your heart racing.” Again, not on sale here, but if you’re tempted you could certainly fashion your own flavour mix (spicy Cheetos and caramel popcorn, anyone?).
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Company%20Profile
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The five pillars of Islam
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
UAE currency: the story behind the money in your pockets
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Ballon d’Or shortlists
Men
Sadio Mane (Senegal/Liverpool), Sergio Aguero (Aregentina/Manchester City), Frenkie de Jong (Netherlans/Barcelona), Hugo Lloris (France/Tottenham), Dusan Tadic (Serbia/Ajax), Kylian Mbappe (France/PSG), Trent Alexander-Arnold (England/Liverpool), Donny van de Beek (Netherlands/Ajax), Pierre-Emerick Aubameyang (Gabon/Arsenal), Marc-Andre ter Stegen (Germany/Barcelona), Cristiano Ronaldo (Portugal/Juventus), Alisson (Brazil/Liverpool), Matthijs de Ligt (Netherlands/Juventus), Karim Benzema (France/Real Madrid), Georginio Wijnaldum (Netherlands/Liverpool), Virgil van Dijk (Netherlands/Liverpool), Bernardo Silva (Portugal/Manchester City), Son Heung-min (South Korea/Tottenham), Robert Lewandowski (Poland/Bayern Munich), Roberto Firmino (Brazil/Liverpool), Lionel Messi (Argentina/Barcelona), Riyad Mahrez (Algeria/Manchester City), Kevin De Bruyne (Belgium/Manchester City), Kalidou Koulibaly (Senegal/Napoli), Antoine Griezmann (France/Barcelona), Mohamed Salah (Egypt/Liverpool), Eden Hazard (BEL/Real Madrid), Marquinhos (Brazil/Paris-SG), Raheem Sterling (Eengland/Manchester City), Joao Félix(Portugal/Atletico Madrid)
Women
Sam Kerr (Austria/Chelsea), Ellen White (England/Manchester City), Nilla Fischer (Sweden/Linkopings), Amandine Henry (France/Lyon), Lucy Bronze(England/Lyon), Alex Morgan (USA/Orlando Pride), Vivianne Miedema (Netherlands/Arsenal), Dzsenifer Marozsan (Germany/Lyon), Pernille Harder (Denmark/Wolfsburg), Sarah Bouhaddi (France/Lyon), Megan Rapinoe (USA/Reign FC), Lieke Martens (Netherlands/Barcelona), Sari van Veenendal (Netherlands/Atletico Madrid), Wendie Renard (France/Lyon), Rose Lavelle(USA/Washington Spirit), Marta (Brazil/Orlando Pride), Ada Hegerberg (Norway/Lyon), Kosovare Asllani (Sweden/CD Tacon), Sofia Jakobsson (Sweden/CD Tacon), Tobin Heath (USA/Portland Thorns)
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
OPINIONS ON PALESTINE & ISRAEL
