Comments on Amendments of Legislation in Dubai International Financial Centre DIFC.
By: Angel Puente Reyes
As of 12th of January 2026 new Rules will be implemented by the Dubai Finance and Securities Authority DFSA, which is the financial regulator in the Dubai International Financial Centre DIFC.
The regulation brings two main verticals that are “assessing the suitability of a crypto tokens” and policy statements around “fiat crypto tokens”.
The previous is highly relevant, since the standard pursuant to Section 1.16 and 3.1.16 of the previous DFSA Rulebook of Collective Investment Rules, following the criteria specified in GEN section 3A, for an Investment fund to invest or have any sort of exposure on crypto assets; it was a must to be Registered as ‘recognize token’ under the DFSA.
For this purpose, the DFSA used to have a listing procedure including a USD 5,000 application fee for applying to such listing, which could have seen as a red-tape scenario or barrier to entry for instance for decentralized projects like Kaspa with no institution or central entity behind them.
As mentioned, the DFSA is a public institution stablished in the Dubai International Financial Centre DIFC, and it is a financial regulator by nature, which also has issue guidelines or best practices on the financial and capital markets, including financial services and digital payment systems in the DIFC jurisdiction. It is precisely under section 44A) of the September 2004 Regulatory Law DIFC Law No.1 of 2004, one of the powers given to the DFSA authority is to regulate crypto tokens in a comprehensive manner.
1. Eradication of the ‘crypto token listing’.
The prior “authorized list of tokens” requirement has been substituted by a suitability test. Before this 2026 legal provisions come to force, there was an authorized list of tokens that have been registered within the DFSA allowing institutions to have exposure to such digital assets. Here it is important to understand that there is a fundamental reason why retail and institutions are seen with a differential manner in the context of DIFC. The later represents a guarantee somehow to prevent that institutional capital, included accredited investors or high network individuals, investment funds or funds of funds could only interact with certain digital assets that have either being white-listed because there is a proven used case, or those that comply with the requirements to become permissible and eligible to be listed as such, and therefore the institutional market could access such in a permissible manner.
The DFSA white-listed BTC, ETH and SOL, since are the largest by market capitalization and their use case somehow is proven large in proportion. The rest of the tokens that have been approved by the institution was XRP, TON and stables such as USDC and USDT where the various foundations, companies or private institutions linked to such projects requested such registration before DFSA. Therefore, only after a token was listed before the DFSA, it was possible for an investment fund or any institutional investor to have permissible and compliant access to investing in such cryptocurrency or token.
Pursuant to section 1.6 of the DFSA Rulebook on Collective Investment Funds, it was defined when an investment fund was regarded a fund that invest in crypto tokens. The definition included that any investment fund was considered crypto in nature in case it invests either directly or indirectly in a token or digital asset. For which purpose, invest represented the investment consisting in the token or having exposure to such token. In case the investment was a derivative product of such underlying asset, which included any index or even investing in another fund, which had exposure to digital assets or property that tracks such underlying. The said Rulebook on Collective Investment, under Section 3.1.16 determined:
“A Fund is a Crypto Token Fund if its main purpose is investing in Crypto Tokens […] Guidance A Fund in the DIFC is, except as specified in GEN Rule 3A.2.1(3), only permitted to invest in a Recognised Crypto Token i.e. a Crypto Token that the DFSA has recognised as meeting criteria specified in GEN section 3A. See also the definition in GEN Rule 3A.1.2 of when a Fund invests in a Crypto Token, which applies for the purposes of the requirement in GEN 3A.2.1.”
I had the privilege to meet in person with two Markets Managers at DFSA last summer at their DIFC office, for discussing how within that framework a KASPA listing could be considered as part of the listed permissible digital assets before the said regulator. The prior, since KASPA is a decentralized proof-of-work cryptocurrency, fair launched following the Bitcoin ethos, so by definition would be an asset without and issuer, adding also the robust architecture of Kaspa and proprietary features of its development. This same suggestion was included in a remark I made to the Consultation Papers No 168 and 165 from the DFSA Board.
Currently, the suitability test following the guideline, represents a self-assessment from the market participant to conduct sufficient due-diligence to prevent engaging with risk assets. Now, under 3A.2.1 a) and b) standards incorporates obligations to undertake such assessment regarding a crypto token and conclude under ‘reasonable’ grounds the suitability criteria under the following standards, among others: (i) demonstrate a clear use case; (ii) can effectively traced and on-chain activity monitored on and ongoing basis; (iii) comprehensive documentation on consensus and protocol mechanism; (iv) identification of founders or members with significant influence; (v) number of years or sufficient data on the asset issuance; (vi) information on any concentration or control that may result in price manipulation or fraud; (vii) In case the digital asset is already regulated or approved elsewhere, under other jurisdiction or other financial service regulator, including ongoing supervision for AML/KYC purposes; (viii) size, liquidity and trading history; (ix) age and resilience of the technology, including responsibleness to vulnerability incidents or cyber-attacks.
In consequence, the shift from bureaucratic or discretionary barrier to entry, towards a regulated due-diligence assessment, based on objective and measurable metrics following a suitability test is definitely favourable. Nevertheless, it also comes up with high degree of responsibility from market participants that shall incorporate skilled and capable personnel under their compliance teams to verify and keep track of such criteria.
2. Policy statement on “Fiat Crypto Tokens”.
Overcoming MiCA e-money tokens shortfalls on quarterly reporting for assessing reserves. Perhaps the most relevant development in the policy is the mandate of information demonstrating “Fiat Crypto Token” reserves to be public at least monthly.
However, it is worth mentioning the existing lack of statutory standardization on proof-of-reserves, proof-of-composition and proof-of-liabilities, which is nowadays still a challenge that should be addressed by regulators. Mainly, the capacity to verify both on-chain and off-chain live-data to prevent market collapses, as opposed to static snapshots no matter monthly, weekly or daily that could be manipulated.
Why this is highly relevant for KASPA
The consequence of such listing elimination could lead to institutional investors to have access to Kaspa cryptocurrency in a compliant manner. Now, any ‘person’ or market participant including individuals, corporations, funds, funs of funds, or licensed companies, including financial institutions and accredited investors could allocate capital of their reserves in Kaspa currency or any other asset that meets the suitability criteria.
Also, anyone having a close understanding of Kaspa as a technology infrastructure monster would agree not only that Kaspa checks all the boxes for a suitability-criteria, but more importantly, that Kaspa as a utility sequencer could serve as an ideal information carrier to report live-data information for compliance purposes. We can see the likes of Chainlink Automated Compliance Engine ACE as innovative protocols to report both on-chain and off-chain data that are intrinsically vital for achieving compliance objectives for financial institutions. The previous allows delivering relevant information on the nature, status, composition and liquidity of the underlying asset that is key for both achieving trust minimization and prevent systemic risk events as the October 10th 2025 episode.
If we think liquidity is like needing and oxygen tank and our life depends on it, we would like to know how much is left before taking action. That is why compliance of digital assets demands live-data reporting. And the last time I check, Kaspa is the only system able to deliver this promise with sub-second confirmation, high throughput and unparallel security that only PoW can deliver.
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Angel Puente Reyes
PhD candidate International Law (research focused on Compliance of Crypto Assets)
References:
Dubai Financial Services Authority DFSA. CIR/VER38/08-24: Collective Investment Rules (CIR). DFSA Rulebook, Dubai Financial Services Authority. https://dfsaen.thomsonreuters.com/sites/default/files/net_file_store/DFSA1547_11821_VER380824.pdf.
Dubai Financial Services Authority. Supervisory Guidelines on Assessing the Suitability of Crypto Tokens. 15 December 2025. PDF. https://dfsaen.thomsonreuters.com/sites/default/files/net_file_store/Supervisory_Guidelines_on_Assessing_the_Suitability_of_Crypto_Tokens.pdf. Annex.
Link to the notice of amendments to Legislation: https://www.dfsa.ae/news/notice-amendments-legislation-december-2025-2