Dubai tightens crypto rules on privacy while widening access for funds under new DFSA regime
Dubai's financial free zone has introduced significant changes to its cryptocurrency regulations, effective 12 January 2026. The new DFSA regime prohibits privacy-focused tokens and privacy-enhancing devices—such as Zcash, Monero, and Tornado Cash—from being used in or from the Dubai International Financial Centre (DIFC) for regulated activities. This ensures enhanced traceability and anti-money laundering compliance.
Concurrently, the DFSA has shifted from maintaining a prescribed list of approved tokens to requiring licensed firms to assess, disclose, and continuously review the suitability of crypto tokens for their clients. This mirrors traditional securities evaluation models.
Additionally, investment funds now have greater flexibility to invest in crypto tokens, provided they adhere to robust risk management and use compliant assets. The updated framework aims to align DIFC with global regulatory standards like MiCA, fostering institutional participation while excluding high-privacy, high-risk assets.
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