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DFSA Enhances Crypto Token Framework to Foster Innovation

The Dubai Financial Services Authority (DFSA) has taken a significant step towards solidifying the UAE's position as a hub for crypto innovation. Recent amendments to the DFSA's Crypto Token framework, announced in July 2024, aim to strike a balance between fostering growth and maintaining regulatory control. Let's delve into the specifics of these changes and their potential impact.Dubai: The Dubai Financial Services Authority (DFSA) has announced significant amendments to its Crypto Token regime, based on proposals from the Consultation Paper 153 – Updates to the Crypto Token regime published in January 2024. These latest amendments highlight the DFSA's proactive stance in embracing technological advancements while ensuring robust oversight to protect investors and maintain market integrity. This article explores the key changes introduced by the DFSA and their implications for the crypto token market.Key Amendments to the Crypto Token RegimeThe DFSA's amendments address several crucial areas:Expanded Definitions and Classifications:Starting in March 2024, the DFSA expanded its definitions and classifications of crypto tokens. The new categorization distinguishes between various types of digital assets, such as utility tokens, security tokens, and stablecoins. This refined system aims to provide clarity for market participants and tailor regulatory requirements to the specific characteristics of each token type.Enhanced Licensing Requirements:As of May 2024, the DFSA updated its licensing requirements, imposing stricter criteria for entities involved in the issuance, trading, and custody of crypto tokens. These changes ensure that only credible and well-capitalized entities operate within the DIFC. Applicants must now demonstrate robust risk management frameworks, adequate financial resources, and comprehensive compliance measures to obtain and maintain their licenses.Funds:- Enabling the offering of Units of External and Foreign Funds investing in recognized Crypto Tokens.- Allowing Domestic Qualified Investor Funds to invest in unrecognized Crypto Tokens.Custody:- Providing guidelines for the custody of Crypto Tokens.- Introducing staking of Crypto Tokens.Financial Crime:- Enhancing compliance guidance for financial crime, including the 'travel rule.'- Implementing transaction monitoring and blockchain analysis.Recognition of Crypto Tokens:- Establishing recognition criteria for Fiat Crypto Tokens (stablecoins).- Introducing a fee for the recognition of Crypto Tokens.Market and Regulatory InsightsThese changes are informed by recent market developments, recommendations from international standard-setters, and the DFSA's supervisory experience. Over the past two years, the DFSA has engaged with over 100 firms seeking licenses, gaining valuable insights into market dynamics and regulatory needs.Since the implementation of the Crypto Token regime in 2022, international standards have evolved significantly. Notably, the International Organisation of Securities Commissions (IOSCO) has published recommendations on Crypto, Digital assets, and Decentralised Finance (DeFi). Additionally, the Basel Committee has proposed amendments to standards for banks' exposures to Crypto assets, focusing on the reserve assets of stablecoins.Key Enhancements for Crypto Businesses:•Investment Flexibility: The DFSA now permits the offering of units in external and foreign funds that invest in recognized cryptocurrencies. This opens doors for a wider range of investment opportunities for qualified investors.•Domestic Investment Expansion: Domestic qualified investor funds can now invest in a broader spectrum of cryptocurrencies, including those not yet recognized by the DFSA. This caters to investors seeking exposure to emerging crypto assets.•Custody and Staking Regulations: The framework provides clear guidelines for the secure custody of crypto tokens. Additionally, it establishes rules for staking, a process where investors earn rewards by holding certain cryptocurrencies.•Anti-Money Laundering and Financial Crime Compliance: The DFSA emphasizes robust compliance measures. This includes enforcing the "Travel Rule" for improved transaction monitoring and leveraging blockchain analysis to combat financial crimes.•Streamlined Recognition Process: The DFSA has streamlined the process for recognizing crypto tokens, making it easier for businesses to navigate the regulatory landscape. Additionally, the framework outlines associated fees for this recognition. Regulatory Evolution, International Alignment and Commitment to Innovation and RegulationThe DFSA, we took a balanced approach in the development of this regime and remain committed to evolving it in line with global best practices and standards.The DFSA acknowledges the dynamic nature of the crypto market and its commitment to continuous improvement. The framework is designed to adapt to evolving market trends and incorporate recommendations from international standard-setters like the International Organisation of Securities Commissions (IOSCO) and the Basel Committee on Banking Supervision.Benefits and Potential Impact:•Increased Investment: These changes are expected to attract new businesses and investments to the Dubai International Financial Centre (DIFC). This could lead to a more vibrant and diversified crypto ecosystem within the UAE.•Enhanced Innovation: By providing a clearer regulatory framework, the DFSA aims to encourage responsible innovation in the crypto space. Businesses will have more clarity on compliance requirements, allowing them to develop innovative crypto-related products and services.•Investor Protection: The focus on anti-money laundering and financial crime compliance fosters a safer environment for investors. This can build trust and confidence in the UAE's crypto market.Application ProcessFirms, whether currently authorized by the DFSA or not, interested in conducting business related to Crypto Tokens within or from the DIFC, can apply via the DFSA website (https://www.dfsa.ae/innovation).In ConclusionThe DFSA's amendments to the crypto token regime in 2024 mark a pivotal step in the evolution of digital asset regulation within the DIFC. By addressing the unique challenges posed by crypto tokens, the DFSA is paving the way for a more secure, transparent, and dynamic market. As the digital asset landscape continues to evolve, these regulatory changes will play a crucial role in shaping the future of finance in Dubai and beyond.ALKETBI TOUCH:ALKETBI team is highly skilled and frequently provides legal assistance specializing in drafting and reviewing all contracts and documentation related to regulatory licensing inclusive of digital assets and crypto frame in both mainland and free zones. If you need further details or would like to enquire whether you qualify, Let us know!

Legal Recourse for UAE Employees Facing Verbal Abuse and Misconduct by Employers

The UAE prioritizes a safe and respectful work environment for its employees. Verbal abuse and misconduct by employers are illegal and can have serious consequences. Dubai: This article dives deep into your rights as an employee in the UAE and the legal framework protecting you from such behavior.Understanding the ScenarioIn many workplaces, employees occasionally face challenges that extend beyond professional disagreements. For instance, working as an administrative executive at a freezone company, you may encounter a new team leader whose behavior is highly disrespectful and often demeaning. Such leaders may shout at employees and then attempt to make amends with superficial gestures like buying snacks. This dual behavior can create a hostile work environment, especially when the leader maintains a cordial relationship with the company's directors, making it difficult to file formal complaints without fear of repercussions.What Constitutes Verbal Abuse and Misconduct?The law doesn't provide an exhaustive list, but verbal abuse can include:• Shouting or yelling• Swearing or using offensive language• Making threats or intimidation• Humiliation or insults• Derogatory remarks about race, religion, or nationalityUAE Legal Framework for your protection The UAE has a robust legal framework to protect employees from various forms of workplace abuse. •Federal Decree-Law No. 33 of 2021 on Regulation of Employment Relations: Article 13(13) mandates employers to provide a safe and suitable work environment. This includes protection from harassment, encompassing verbal abuse. Additionally, Article 14(2) of the same law explicitly prohibits harassment in any form, including verbal, physical, and psychological abuse. This legislation safeguards employees from mistreatment by employers, superiors, colleagues, or any other individuals at the workplace.•Federal Law No. 31 of 2021 on the Issuance of the Crimes and Penalties Law: Article 427 prohibits insulting anyone, including employees, with potential penalties of imprisonment (up to 6 months) or fines (up to Dh5,000). This law serves as a deterrent against workplace abuse and provides a legal avenue for employees to seek justice.Taking Action Against Verbal AbuseEmployees who experience verbal abuse or other forms of misconduct have the right to take action.  •The first option is to file a complaint with the Ministry of Human Resources and Emiratisation (MoHRE). Upon filing the complaint, employees can also choose to resign without notice within five days, as outlined in Article 45(2) of the Employment Law. This provision ensures that employees can leave a hostile work environment while retaining their entitlements, provided they report the misconduct to the relevant authorities within the stipulated timeframe.•The second option can be Resignation without Notice: If the abuse is severe, you can resign without serving a notice period, provided you register a complaint with MoHRE within five (5) days of resigning.Additional Considerations•Evidence Collection: Maintain a record of the abuse, including dates, times, witnesses (if any), and specific details of the incidents. Emails, recordings (subject to UAE recording laws), or notes can be helpful.•Seeking Legal Advice: Consulting a lawyer specializing in UAE labor law can be beneficial, especially for complex situations or seeking compensation.In conclusionRemember that as an employee you have the right to a respectful work environment. Don't hesitate to take action against verbal abuse and preserve your well-being. If a boss engages in behavior such as demeaning language or public shouting, they can face severe penalties for misconduct. The UAE law has set protection metrics to assist you in maintaining your dignity as a human being. ALKETBI TOUCH:ALKETBI emphasizes the importance of understanding one's legal rights in the workplace. Our team is highly skilled and frequently provides legal assistance specializing in sustaining employees and businesses. ALKETBI advises employees to seek legal counsel when facing abuse and to utilize the protections afforded by UAE law. For further insights and updates on law reforms, visit our website and social media platforms. If you request further advice or have concerns and queries, contact us!

HOW TO COLLECT END-OF-SERVICE BENEFITS (EOSB) AFTER LEAVING THE UAE

Leaving a job in the UAE and returning home can be a bittersweet experience.  While you're excited for your next chapter, there's also the important matter of securing your rightful End-of-Service Benefits (EoSB). EoSB is a specified monetary payment paid by the organization to the employee upon employment termination. It is also referred to as severance pay or gratuity pay. Dubai: These benefits provide financial security during your transition and are a crucial aspect of UAE labor law.  This guide will equip you with the knowledge and steps to navigate the process of collecting your EoSB after leaving the UAE, ensuring a smooth and successful resolution. Common Concerns and Legal Provisions: One of the most common concerns for employees enters about leaving the UAE without closing their salary account and before receiving the full and final settlement. They worry about the legality and whether their account might be frozen after their residency visa is canceled. As a reply, ALKETBI says that in the UAE, employers are required to pay end-of-service benefits within 14 days of the employee's last working day, as stipulated by Article 53 of Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations. Eligibility: ·       You are generally entitled to EoSB if you have completed one (1) year of continuous service with your employer under a limited. Exceptions might exist for specific termination reasons outlined in the employee’s employment contract or the Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations . Steps to Take: Gather Documents: ·       Employment Contract ·       Latest Salary Certificate (pay slip) ·       Emirates ID copy (if applicable) ·       Proof of visa cancellation (if applicable) ·       Any other relevant documents (if) mentioned in your contract regarding EoSB Contact Your Employer: ·       Inform your employer in writing (email or registered mail) of your intention to claim your EoSB. ·       Clearly state your last working day and your preferred method of receiving the EoSB (bank transfer or cheque). ·       Request a written confirmation of the EoSB amount you are entitled to receive based on your salary and years of service. Negotiate (if Necessary): ·       If you disagree with the calculated EoSB amount, attempt to negotiate with your employer. Refer to your employment contract and the Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations for the calculation formula. Ministry of Human Resources and Emiratization (MoHRE): ·       If your employer refuses to pay or delays payment unreasonably (usually within 14 days of your last working day), you can file a complaint with the MoHRE. ·       You can initiate the complaint process online through the MoHRE website (https://www.mohre.gov.ae/) or by visiting their service centers. ·       Bring all your documents and any communication with your employer regarding the EoSB dispute. Additional Considerations: ·       Leaving the Country: While it's ideal to settle your EoSB before leaving the UAE, it's not always possible. In such cases, clearly communicate your bank details (IBAN) to your employer for electronic transfer. Ensure you have a reliable contact person in the UAE who can follow up on your behalf if needed. ·       Bank Account Closure: If you plan to close your UAE bank account after leaving the country, inform your employer beforehand and discuss alternative payment methods if electronic transfer is not possible. Key Points: End-of-Service Payment: Employers must pay all due salaries and entitlements within 14 days post-contract expiry. Bank Account Status: Leaving the UAE post-residency visa cancellation typically does not lead to automatic freezing of salary accounts. However, it's recommended to close all UAE bank accounts if you do not intend to return. Account Closure: Procedure: According to Article 9(b) of the UAE Central Bank Regulation No. 29/2011, banks must close accounts without penalties if requested after one year from the account opening date. The closure and certification must be completed within seven days of the request. Dormant Accounts: Accounts with no activity for three years may be marked as dormant per UAE Central Bank Circular No. 1/2020. This status applies if there are no transactions or communications from the account holder. Recommended Steps: Follow-Up: Contact your previous employer to ensure timely payment of end-of-service benefits into your UAE bank account. Withdrawal and Closure: Once the benefits are credited, withdraw the funds, close the account, and obtain a closure certificate from the bank. Applicable Laws: Federal Decree Law No. 33 of 2021 on the Regulation of Employment Relations UAE Central Bank Circular No. 1/2020 on Dormant Accounts UAE Central Bank Regulation No. 29/2011 on Bank Loans & Services to Individual Customers For further assistance, consult with legal experts or relevant authorities. In Conclusion By following these steps and understanding your employee rights under UAE labor law, you can successfully claim your EoSB even after leaving the UAE. Remember, gathering the necessary documents, initiating clear communication with your employer, and knowing when to involve the Ministry of Human Resources and Emiratization (MoHRE) are key to a positive outcome. With proper planning and this guide as your reference, you can confidently secure your EoSB and move forward with your next chapter. ALKETBI TOUCH: ALKETBI team is highly skilled and frequently provides legal assistance specializing in sustaining employers and employees. For further insights and updates on employment law reforms, visit our website and social media platforms as it provides valuable resources and guidance for understanding the complex landscape of employment law in the region and beyond. If you request further guidance or you have concerns and queries, Let us know!

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