Dubai Financial Services Authority Imposes Ban on Privacy Tokens within DIFC effective January 12, 2026
The Dubai Financial Services Authority (DFSA) has implemented a comprehensive ban on privacy tokens (e.g., Monero and Zcash) and related activities within the Dubai International Financial Centre (DIFC), effective from January 12, 2026. The prohibition applies to all DFSA-regulated firms and is primarily due to concerns over anti-money laundering (AML) and sanctions compliance risks.
Key Insights
Prohibited Activities: The ban covers trading, promotion, investment fund exposure, and the creation of derivatives linked to privacy tokens. DFSA-regulated firms are also banned from using or offering transaction obfuscation tools like mixers.
Reasoning: The DFSA cited that the anonymity features of these tokens make it nearly impossible for firms to comply with the Financial Action Task Force (FATF) requirements, which mandate the identification of both senders and receivers in crypto transactions.
Regulatory Shift: As part of an updated regulatory framework, the DFSA has shifted the responsibility for assessing and approving crypto assets from the regulator to the licensed firms themselves. Firms must now conduct their own due diligence, document their evaluations, and ensure the tokens they list meet strict compliance standards for transparency and traceability.
Scope: The ban applies specifically to regulated activities within the DIFC, which operates under a common-law framework separate from the broader emirate of Dubai. Mainland Dubai's Virtual Assets Regulatory Authority (VARA) had previously introduced its own explicit ban on privacy coins in February 2023.
#Dubai #DFSA #CryptoNews #CryptoRegulation #Monero