Animoca Brands’ receipt of a Virtual Asset Service Provider (VASP) license from Dubai’s Virtual Assets Regulatory Authority (VARA) on 5 February 2026 marks a notable expansion of regulated digital asset intermediation in the Gulf. The approval, which authorizes broker-dealer activity and digital asset management targeting institutional and qualified investors, contributes to the region’s trajectory toward regulated on-chain market infrastructure. For institutional DeFi, the development signals continued consolidation around jurisdictions capable of supervising hybrid centralized–decentralized operating models.

Strategic Context and Regional Dynamics

VARA, established in March 2022, has positioned Dubai as a licensing hub for firms seeking operational clarity across trading, investment management, and token issuance. Recent approvals, such as BitGo’s broker-dealer license in October 2025, indicate that VARA’s framework is maturing into a multi-operator ecosystem with coordinated supervisory expectations. Animoca’s expansion follows its acquisition of Somo in January 2026 and builds on its in-principle fund management approval in Abu Dhabi in November 2025, reinforcing the UAE’s multi-pillar digital asset regulatory architecture.

A brief note: broader macroeconomic conditions are omitted due to lack of direct relevance to the licensing development.

Market Impact and Structural Implications

The permission to operate as a broker-dealer and digital asset investment manager in Dubai expands the menu of regulated venues capable of onboarding institutional flows into DeFi and tokenized markets. Three structural effects are emerging:

  • Convergence between venture portfolios and managed exposure: Animoca’s 600+ blockchain-investment portfolio may introduce a pipeline of standardized, regulated distribution channels for tokenized assets, subject to VARA oversight.
  • Regional competition in regulated DeFi infrastructure: VARA’s licensing pace offers an alternative to European and Asian regimes that have recently tightened operational obligations, including EU MiCA/PSD2 requirements for stablecoin payments and Hong Kong’s stablecoin licensing regime effective August 2025.
  • Shift in institutional routing: The UAE is advancing DeFi oversight through its central bank’s nascent framework, enabling the possibility of regulated interactions with on-chain liquidity, although many operational details remain undetermined.

Regulatory and Compliance View

VARA’s approach emphasizes licensing discipline and enforcement, having issued financial penalties against 19 firms for unlicensed virtual asset activities in 2025. For regulated actors, this underscores the need for demonstrable governance, risk management, and disclosure capabilities before receiving approval to conduct market-facing services.

Key compliance considerations for broker-dealer and asset management operations under VARA include:

  • Governance and controls: Firms must maintain internal oversight structures capable of segregating client assets, monitoring trading activity, and enforcing supervisory review over smart contract interactions.
  • AML/KYC and transaction monitoring: While VARA’s rulebook aligns with FATF principles, the UAE’s emerging DeFi oversight implies heightened expectations around traceability tooling for on-chain transfers and potential FX-like treatment for certain cross-border flows (similar to Brazil’s treatment of stablecoin transfers).
  • Reporting and auditability: VARA’s demonstrated enforcement posture suggests increasing alignment with jurisdictions mandating frequent disclosures. Brazil’s requirement for monthly disclosures and biennial audits illustrates the global trend toward recurring transparency obligations.

Unlike EU Pi/EMI regimes for EMTs or Hong Kong’s stablecoin requirements, VARA’s framework remains technology-agnostic, focusing on activity licensure rather than specific token typologies. This may attract firms seeking operational flexibility while preparing for more detailed DeFi governance rules in the UAE.

Product and Structuring Implications

Animoca’s license enables regulated structuring of brokerage and investment products for institutional and qualified investors. Implications include:

  • Tokenized fund distribution: A regulated Dubai entity could structure compliant feeder vehicles into tokenized venture, gaming, or digital infrastructure strategies, subject to VARA’s suitability and offering rules.
  • Collateral and liquidity management: Broker-dealer status may support centralized routing into on-chain liquidity pools once the UAE finalizes its DeFi framework. Until then, institutions must maintain strict ring-fencing between on-chain positions and regulated custody environments.
  • Cross-jurisdiction coordination: Firms active in the EU must reconcile VARA-compliant offerings with MiCA’s authorization requirements. For example, stablecoin-based payments routed through EU clients require PI or EMI authorization, as demonstrated by OKX’s February 2026 Malta-issued Payment Institution license.

Risk Evaluation Across Operating Layers

Market risk: Broker-dealer operations involving volatile digital assets require robust margining, liquidity buffers, and execution controls. Exposure to illiquid venture-linked tokens increases the importance of concentration risk management.

Counterparty and credit risk: VARA’s licensing mitigates legal uncertainty but does not eliminate exposure to counterparties operating across fragmented regulatory regimes. Cross-border settlement using stablecoins may introduce FX-like risks as seen under Brazil’s 2025 framework.

Operational and cyber risk: Managing 600+ portfolio assets and multiple blockchain networks heightens key management, smart contract audit, and monitoring requirements. Interoperability with non-UAE jurisdictions adds dependency risk on external custodians and infrastructure providers.

Legal and regulatory risk: Future UAE DeFi regulation may introduce additional compliance obligations. Firms operating across the US, EU, and APAC must adapt to diverging frameworks, such as the UK’s proposed holding caps on stablecoins and Canada’s draft 1:1 reserve and qualified custody rules.

Operational Implementation Considerations

Firms preparing for VARA-regulated operations should sequence implementation across the following areas:

  • Control environment mapping: Align internal risk, compliance, and treasury procedures with VARA’s expectations, ensuring traceability for broker-dealer flows and managed accounts.
  • Infrastructure readiness: Integrate surveillance, on-chain analytics, and permissioned DeFi access pathways compatible with both UAE and global reference jurisdictions. Where DeFi oversight rules remain undefined, design interim guardrails.
  • Supervisory coordination: Maintain multi-regulator mappings across Abu Dhabi, EU, Hong Kong, and Latin American frameworks to avoid fragmented policies, particularly for cross-border stablecoin or tokenized asset flows.

Forward-Looking Assessment

Dubai’s licensing trajectory suggests increasing granularity in regulated digital asset market structure. Over the next 12 to 24 months, three developments merit monitoring:

  • Evolution of the UAE DeFi framework, including definitions for permissioned liquidity pools and smart contract governance.
  • Growth in regulated tokenized market participation, informed by global benchmarks such as stablecoin payments rising 350% year-over-year and tokenized money market funds expanding at over 200% CAGR.
  • Interaction between venture-led ecosystems and regulated broker-dealer channels, potentially creating a normalized path from early-stage token issuance to institutionally accessible secondary markets.

Animoca’s Dubai license does not by itself shift the structure of institutional DeFi, but it reinforces a broader pattern: jurisdictions with clear onboarding pathways for intermediaries are becoming the primary nodes through which institutions access on-chain markets.

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