Identifying the right VARA licence starts with the operating model, not the label attached to the business. A platform may call itself an exchange, marketplace, broker, infrastructure provider or token platform, but the regulatory analysis turns on the functions it actually performs in Dubai, outside the DIFC.
That distinction matters because a single business model may involve more than one VARA licensed activity. The practical task is therefore to map each function, identify who performs it and for whom, and then determine which permissions the model may require.
VARA recognises eight licensed activity categories. Some sit close together in commercial terms but are different for regulatory purposes, while others, particularly Custody Services, generally stand apart.
How does VARA determine which licence applies?
The starting point is the substance of the business model. Marketing language is not enough to determine the regulatory perimeter.
A useful analysis looks at what the platform actually does for users: whether it recommends transactions, arranges or executes trades, manages client assets, operates a market, transfers assets, holds assets for clients, lends or borrows them, or issues Virtual Assets.
The same product can therefore lead to different regulatory outcomes depending on the functions performed around it. A business should map those functions before deciding how to structure its entity, technology stack or client journey.
What are VARA’s eight licensed activities?
The eight activity categories are:
- Advisory Services
- Broker-Dealer Services
- Custody Services
- Exchange Services
- Lending and Borrowing Services
- VA Management and Investment Services
- VA Transfer and Settlement Services
- VA Issuance
The important point is not simply to select the category that sounds closest to the business description. The regulated function must be matched to the actual service provided.
How do Advisory, Broker-Dealer and Management activities differ?
These three categories can look similar when a business helps a client decide what to do with Virtual Assets, but the degree of involvement is different.
Advisory Services
Advisory Services cover personal recommendations relating to Virtual Assets. The relevant issue is whether the business is moving beyond general information and into a recommendation directed to a particular client.
Broker-Dealer Services
Broker-Dealer Services include arranging orders, facilitating the matching of transactions and dealing in Virtual Assets. A VASP licensed for Broker-Dealer Services may also carry out Advisory Services, subject to the additional applicable requirements.
A business that describes itself as a marketplace or execution platform should therefore analyse the steps it takes between a client decision and the completion of a transaction.
VA Management and Investment Services
VA Management and Investment Services concern responsibility for managing client assets. This is different from merely advising a client who retains control over the final decision.
What is the difference between Exchange and Transfer and Settlement Services?
The fact that the same Virtual Assets move through a platform does not mean the same regulated activity is being performed.
Exchange Services cover Virtual Asset trading or conversion, whether against fiat currency or another Virtual Asset. This can include matching orders and maintaining an order book.
VA Transfer and Settlement Services instead concern moving or settling Virtual Assets between parties, wallets or addresses. The key question is whether the business is operating the trading venue or conversion function, or providing the infrastructure or service that transfers and settles assets after or independently of a trade.
Why does Custody generally stand apart?
Custody Services generally require a distinct legal entity and a standalone licence. A limited exception allows a Custody VASP to apply to add VA Transfer and Settlement Services, subject to VARA approval and appropriate operational segregation. This makes custody an important structuring issue when a wider platform also wants to hold or control client Virtual Assets.
A business model should therefore identify at an early stage who controls client assets, wallets or access mechanisms, rather than treating custody as an operational detail to be considered after the rest of the licence perimeter has been mapped.
Where do Lending and Borrowing Services fit?
Lending and Borrowing Services form a separate licensed activity category. At a high level, they cover transfers of Virtual Assets that are subject to an obligation to return the assets.
A product described commercially as financing, yield, liquidity provision or another arrangement should still be analysed by reference to the underlying asset flows and obligations rather than its product label.
Does every Virtual Asset issuance require a VARA licence?
No. The issuance framework distinguishes between different categories.
Category 1 VA Issuance requires a VARA licence. Category 2 and Exempt VA issuances do not require that licence, but they remain subject to the VARA VA Issuance Rulebook, with different requirements applying to each category. For Category 2 issuances, all placement and distribution must be carried out by a Licensed Distributor.
For token projects, this means that “no licence required” should not be treated as equivalent to “outside the regulatory framework”. The issuance category and the applicable Rulebook requirements still need to be identified before launch.
What should a business map before approaching VARA?
1. Each client-facing function
Document what the business does from onboarding through execution, settlement and ongoing asset handling. Avoid relying on broad labels such as “platform” or “marketplace”.
2. Decision-making and control
Identify who recommends, executes, manages, transfers or controls Virtual Assets at each stage. This helps distinguish activities that can otherwise look similar from the client’s perspective.
3. Transaction flow
Map the movement of fiat currency and Virtual Assets between clients, wallets, counterparties and the platform. The flow can reveal Exchange, Transfer and Settlement, Custody or Lending and Borrowing functions.
4. Issuance activity
If the model involves issuing a Virtual Asset, determine whether the issuance falls within Category 1, Category 2 or an Exempt VA issuance and what requirements apply.
5. Entity and licence structure
Once the functions are mapped, determine which activities may sit within the same licensing structure and whether any function, particularly custody, needs to stand apart.
Key takeaway
VARA licensing is function-led. The right question is not “what do we call the business?” but “what does the business actually do?”
- For founders and operators, an early regulatory perimeter analysis should identify each regulated function before the operating model becomes difficult to change.
- That is particularly important where a platform combines execution, asset management, settlement, custody or issuance.
Frequently asked questions
Can one business model require more than one VARA licensed activity?
Yes. A single operating model may perform several regulated functions, so each function should be analysed separately before the required licence structure is determined.
Is calling a platform an “exchange” enough to determine the VARA licence?
No. The analysis turns on the functions the platform actually performs, not the commercial label attached to it.
What is the difference between VARA Exchange Services and Broker-Dealer Services?
Exchange Services concern operating Virtual Asset trading or conversion functions, including order matching and an order book. Broker-Dealer Services include functions such as arranging orders, facilitating transaction matching and dealing in Virtual Assets.
Are VA Transfer and Settlement Services the same as Exchange Services?
No. Transfer and Settlement Services concern moving or settling assets between parties, wallets or addresses, while Exchange Services concern the trading or conversion function.
Can Custody Services be combined with other VARA activities?
Custody Services generally require a distinct legal entity and standalone licence. A Custody VASP may apply to add VA Transfer and Settlement Services to the same entity, subject to VARA approval and the required operational segregation.
Does issuing a Virtual Asset always require a VARA licence?
No. Category 1 VA Issuance requires a VARA licence. Category 2 and Exempt VA issuances do not, although they remain subject to the VA Issuance Rulebook. For Category 2 issuances, all placement and distribution must be carried out by a Licensed Distributor.
Official sources
Virtual Assets Regulatory Authority (VARA)
VARA Rulebooks
- Schedule 1 — VA Activities.
- Advisory Services Rulebook.
- Broker-Dealer Services Rulebook, including Part C — Placing and Distributing Virtual Assets.
- Custody Services Rulebook, including the provisions on permitted additional activities.
- Exchange Services Rulebook.
- Lending and Borrowing Services Rulebook.
- VA Management and Investment Services Rulebook.
- VA Transfer and Settlement Services Rulebook.
- Virtual Asset Issuance Rulebook and the Guidance on the Virtual Asset Issuance Rulebook.
Mapping your VARA licence perimeter
BLegal advises Virtual Asset businesses on VARA regulatory perimeter analysis, licence structuring and applications, including mapping operating models across multiple regulated functions.
If you are designing or revising a Dubai Virtual Asset business model, we can help identify the activities your structure may trigger and translate that analysis into a practical licensing route.
Last reviewed: 3 September 2026
Disclaimer. This article is provided for general information only and does not constitute legal or regulatory advice. The applicable framework depends on the specific token, activities, entity structure and jurisdictions involved. Regulatory requirements and interpretations may change. Businesses should obtain advice based on their particular circumstances before making structuring, licensing or commercial decisions.