UAE / VARA: Refocusing a Licence Application on One Activity

An international group with licences in Europe and Latin America applied to VARA and received extensive regulator questions. We rebuilt the application around the one activity the client can operate, with a money-flow model, a new business plan and financial model, and updated compliance policies.

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Case
at a Glance

Client:
Crypto exchange [[confirm activity type]], part of an international group

Situation:
Licensed entities in the EU and Latin America; VARA application already filed

Challenge:
An application built on intended scope rather than on how the product operates

Medici Scope:
Application audit · Product model · Money-flow model · Business plan and financial model · Compliance policies · Communication with VARA

Jurisdiction:
UAE, Dubai (VARA)

Timeline:
Filed in March [[year]] · [[our timeline]]

Outcome:
In progress: VARA decision pending

Context

Licensed in two regions. Dubai was planned as the next market.

The group held licensed entities in several jurisdictions, including Europe and Latin America, and was bringing its exchange to the MENA region.

The objective was a VARA licence and an exchange operating in Dubai.

The Challenge

The application described intentions. VARA required operating detail.

Not Tested Against the Product

The application reflected the client's vision without verifying how the product would operate. VARA responded with an extensive list of questions.

An Unjustified Activity

One of the two activities applied for was rare and costly, with no clear business case.

Changed Requirements

After filing, the UAE updated its AML and compliance requirements. The documents had to be brought into line.

Stalled Communication

The client was not receiving responses from the regulator.

From Stalled Application to Active Review

March [[year]] · Application Filed

Submitted before Medici's involvement.

Before: broad application (custody, exchange, brokerage, token issuance).

[[timing]] · Audit

The client asked why VARA was raising so many questions. We audited the application.

Product Walkthrough

How funds move, who holds them and how client assets are segregated.

One Activity

The application narrowed to the activity the client can operate.

Two activities, one without a business case.

Core Documents Rebuilt

New business plan, financial model and policies reflecting the August changes.

Current · Regulator Engagement

Direct communication with the VARA case manager.

What Made the Case Difficult

Licensing experience elsewhere did not transfer automatically.

The VARA Review

In plain terms: VARA reviews how a business will operate day to day: where client funds are held, who can move them and what happens when something fails.

Money-Flow Model

Without a money-flow model, an application does not progress.

UAE Requirements

EU and Latin American licences do not carry over. The UAE applies its own obligations, risk expectations and compliance requirements.

Updated Requirements

The August [[year, act]] changes updated AML and compliance requirements, so a March application needed revision.

Timeline & Scope

The process takes about 12 months [[confirm]]. Each additional activity extends it and increases cost.

Our Approach

Licence what the business can operate.

Scope defined by capability.

A licence should cover activities the client can run, not every activity it can afford. A broader application serves the adviser, not the client.

The questions the application had not answered.

Where are client funds held, and in which currency? Is there hedging? How do funds move between wallets? Does a transfer make the company a custodian? How are client funds protected when unexpected costs arise? Does the budget hold if requirements call for 20 staff instead of 10?

One activity, supported by a money-flow model.

The application was narrowed to the activity the client understands, with a clear view of how funds move within the platform.

Direct regulator engagement.

Contact with the case manager now provides timely, detailed information.

The Outcome

In progress: VARA decision pending

Focused Application

One activity, with documents aligned to the updated UAE requirements.

Operational Clarity

The client understands how funds will move, and which obligations and operating costs apply.

Defensible Path to Licensing

Active communication with the regulator and a credible route to authorisation. [[update after VARA's decision]]

*Timelines and outcomes depend on the regulator's review.

Applying to VARA?

Three points to check.

Identity card examined with a magnifying glass

Apply only for activities you can operate.

Each additional activity adds questions, time and cost.

Build the money-flow model before filing.

Not after the regulator's first round of questions.

Recalculate operating costs against UAE requirements.

Experience from other jurisdictions does not transfer automatically.

VARA Raising Extensive Questions on Your Application?

Send it to us. We will identify why, and what needs to change.

Discuss Your Case