Virtual Asset Service Provider is an entity or business that facilitates activities involving virtual assets, such as cryptocurrency transactions. Virtual Asset Service Provider (VASPs) include cryptocurrency exchanges, wallet providers, and other entities offering services like trading, transferring, or safekeeping digital assets.
If you’ve been paying attention to the buzz around digital finance lately, you’ve probably heard terms like virtual assets and crypto compliance tossed around a lot more often. Virtual assets are digital manifestations of value which can range from Bitcoin to tokenized real estate and are no longer reserved for tech-savvy investors. They are beginning to appear on the balance sheets of companies, in client portfolios, and even in day-to-day transactions.
The authorities here in the UAE, particularly in Dubai, have been very active in adopting this digital change. Such innovation always brings with it an element of complexity. The regulatory frameworks are still catching up, and that’s the tricky or exciting part, depending on how well you are prepared for it.
As someone who’s worked with business owners and CFOs across various industries, we’ve seen firsthand how fast this landscape is changing. Clients are asking smart questions: Do I need to register as a virtual assets service provider in the UAE? How do I account for crypto on my books? What does compliance even look like in this space? That’s why accounting firms in Dubai including SS &Co. are playing a more strategic role than ever, helping clients stay compliant, minimize risk, and make sense of this brave new financial world.
What is a Virtual Assets Service Provider (VASP)?
In simple terms, a Virtual Assets Service Provider or VASP is any business that helps people or companies deal with virtual assets. According to the Financial Action Task Force (FATF), which sets the global standard for financial regulations, a VASP is any person or entity that, as part of their business, conducts one or more of the following activities:
- Exchange between virtual assets and fiat currencies (like AED or USD)
- Exchange between different types of virtual assets
- Transfer of virtual assets
- Safekeeping or administration of virtual assets (like custody services)
- Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset
To make it more real: think crypto exchanges like Binance, custodians that store digital assets securely, crypto-wallet providers, or even newer fintech startups helping clients tokenize real estate or assets.
In the UAE and particularly in Dubai’s progressive financial scene, these entities are becoming more common, and more regulated. The government is taking a firm but forward-thinking stance: encouraging innovation but also expecting clear accountability and compliance. If your business touches crypto or digital assets in any way, you could be considered a VASP, even if you’re not a traditional financial company.
UAE’s Regulatory Framework for VASPs
The UAE has been making bold, strategic moves to position itself as a global hub for virtual assets and it’s doing so with a surprisingly mature regulatory approach. Rather than taking a “wait and see” stance like many other countries, the UAE has created specific frameworks to support innovation while maintaining financial integrity and security.
At the center of this effort is the Virtual Assets Regulatory Authority (VARA), established in 2022 in Dubai. VARA oversees all activities related to virtual assets in the emirate (excluding the DIFC, which we’ll touch on shortly). Whether you’re operating a crypto exchange, managing digital wallets, or launching a Web3 platform, if you’re doing it in Dubai, you’ll likely need to be licensed by VARA.
VARA has clear licensing categories for different types of VASPs and outlines compliance expectations around anti-money laundering (AML), consumer protection, cybersecurity, and reporting. It’s not a rubber-stamp process, and rightly so. But what’s refreshing is the transparency. Businesses know what’s expected, and there’s real engagement between regulators and service providers.
Beyond VARA, Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) also have their own frameworks. ADGM has been an early mover in virtual asset regulation, with its Financial Services Regulatory Authority (FSRA) issuing guidelines that treat virtual assets as commodities, something many of our clients in the capital have appreciated for its clarity. Meanwhile, the DIFC, through the Dubai Financial Services Authority (DFSA), introduced its own crypto token regime in 2022, tailored for firms operating within its financial free zone.
The key takeaway? The UAE isn’t just dipping its toes into the world of digital finance; it’s building the infrastructure to lead it. And for Virtual Asset Service Providers looking to set up shop in a forward-thinking, tax-friendly jurisdiction with strong legal protections, that’s incredibly appealing.
Why do VASPs Need Accounting and Compliance Support?
Running a virtual assets business isn’t just about building great tech, it’s also about staying on the right side of regulation, and that starts with good accounting. If you’re a Virtual Assets Service Provider in the UAE, financial reporting, tax compliance, and audit readiness are mandatory.
One of the first things we help clients understand is that virtual assets behave very differently in books. For example, how do you value a cryptocurrency that fluctuates by 10% in a single day? What about gas fees, token swaps, or staking rewards, how do those get recorded? These are everyday realities for VASPs, but traditional accounting systems aren’t always built to handle them. That’s where specialized support becomes crucial.
We recently worked with a Dubai-based exchange that needed to prepare for its first external audit under VARA guidelines. They had great transaction data, but it wasn’t structured for audit or regulatory reporting. We stepped in to clean up their ledgers, apply fair market value assessments, and build out reporting tools that could scale with their operations. That kind of groundwork is what helps VASPs sleep at night and scale confidently.
Then there’s AML/CFT compliance (that’s anti-money laundering and counter-terrorism financing). UAE regulators take this very seriously, and so should you. VASPs are required to implement robust customer due diligence (CDD), transaction monitoring, and suspicious activity reporting. And while some of these overlaps with tech and legal teams, accounting plays a central role especially when it comes to tracking funds, identifying unusual flows, and documenting internal controls.
SSCO’s Expertise in Virtual Asset Accounting
At SSCO, we’ve been at the forefront of accounting for digital assets long before it became a regulatory requirement. Our team combines deep financial expertise with a clear understanding of blockchain technology, crypto transactions, and the fast-evolving legal landscape here in the UAE.
We’ve supported clients ranging from early-stage startups launching NFT marketplaces to established exchanges navigating VARA’s licensing process. Our services cover everything from day-to-day bookkeeping and virtual asset valuation to AML policy design, tax structuring, and audit preparation. In a space where things move quickly and mistakes can be costly having a team that speaks both accounting and crypto makes all the difference.
Why does this matter for VASPs? Because regulators are watching closely, investors want transparency, and your internal processes need to be watertight.
If you’re not sure where your business stands in terms of compliance, or you’re exploring how to scale sustainably, we’d be happy to talk. Whether it’s a quick consultation or a full-service engagement, SSCOGLOBAL is here to help you navigate this new digital frontier with confidence.
