DFSA updates DIFC crypto token suitability rules
On 12 January 2026, the Dubai Financial Services Authority (DFSA) – the financial services regulator of the Dubai International Financial Centre (DIFC) – announced key amendments to its crypto regulatory framework in Dubai and DIFC crypto token rules. These changes form part of the evolving DFSA crypto regulation landscape for virtual assets in the DIFC.
The core change is a shift in responsibility for crypto token suitability assessments from the DFSA to DFSA-authorised firms operating in or from the DIFC. This is a significant development for DIFC crypto businesses, including crypto exchanges in the DIFC, crypto custodians, brokers, and other regulated entities operating under DIFC crypto compliance requirements.
Why is this important for DIFC crypto firms
Previously, the DFSA maintained a closed list of “Recognised Crypto Tokens” based on its own assessment of which tokens were suitable for use in connection with regulated financial activities in the DIFC. Under the amended approach, the DFSA will no longer operate a prescribed list of recognised tokens under the DIFC crypto rules.
Instead, DFSA-authorised firms must perform and document their own suitability assessments for any crypto assets they custody, deal in, list, hold, or otherwise use in connection with regulated activities. This materially increases firm accountability under DFSA compliance requirements and makes the quality of internal documentation and controls a front-line requirement for crypto regulation in Dubai.
What are stakeholders expected to do under the DFSA crypto regulation
Firms must ensure that any crypto tokens used in regulated activities are suitable for the firm’s intended activity and the relevant client type (including retail versus professional clients), in line with DIFC crypto token suitability standards.
To support this process, the DFSA has set out five key suitability assessment criteria for DFSA-authorized firms:
- Token characteristics and qualities;
- Regulatory status in other jurisdictions;
- Market size, liquidity, and trading history;
- Technology and operational resilience; and
- Compliance considerations under the Dubai crypto regulatory framework.
Where a token presents risk indicators, a firm may still proceed if it can justify, on a reasoned and documented basis, why the token remains suitable for the intended regulated use case.
Practical examples for DIFC crypto businesses
Exchange listing a new token
A DIFC-regulated exchange listing a token for trading will need a documented suitability file covering liquidity and market history, operational resilience, and compliance screening before listing under DIFC crypto compliance obligations.
Custodian supporting a new custody asset
A DIFC-regulated crypto custodian onboarding an additional crypto asset will need to evaluate technological risks, governance controls, and suitability for the relevant client segment under DFSA crypto regulation.
Broker offering token exposure to retail clients
A broker must assess whether the token is suitable for retail exposure, including volatility, liquidity profile, and associated compliance risks, and document the rationale for offering it in the relevant distribution context.
Why firms should comply with DFSA crypto rules
Non-compliance with DFSA crypto regulation in the DIFC can expose firms to financial penalties, public censure, and supervisory restrictions. Where the DFSA considers a contravention has occurred, it may impose a fine alongside other measures such as remedial directions or restitution.
While the DFSA also has a fixed penalty notice regime for certain contraventions, more serious breaches may result in larger case-by-case outcomes. By way of reference, the DFSA reported USD 2.5 million in total fines in 2024 and has published cases including USD 720,905 (firm) and USD 186,003 (individual) penalties.
Key takeaways on DIFC crypto token suitability
This DFSA update replaces reliance on a regulator-run list with a firm-led suitability model, requiring DIFC crypto firms to implement a structured assessment process supported by robust internal governance and defensible documentation under DIFC crypto regulation.
If your firm lists, deals in, custodies, or otherwise engages with crypto tokens as part of a regulated activity, your suitability assessment framework should be treated as a core compliance control and prepared to withstand supervisory scrutiny under DFSA compliance requirements.
How can we help with DIFC crypto compliance
The DFSA’s move to firm-led crypto token suitability assessments means that documentation, governance, and internal controls are now central to DIFC crypto compliance.
M&CO Legal supports DFSA-authorised crypto firms in Dubai and the DIFC, including exchanges, custodians, and brokers, in building practical, defensible, and audit-ready suitability assessment frameworks, including:
- end-to-end token suitability assessment templates and evaluation criteria;
- board and committee governance and approvals;
- internal compliance procedures aligned to regulated activities and client segmentation; and
- a complete suitability assessment file suitable for DFSA supervisory review.
Whether you are listing new tokens, expanding your custody offering, or onboarding new token exposure for clients, we can help you implement a framework that is commercially usable and regulator-resilient under the Dubai crypto regulatory framework.
If you would like a quick gap assessment of your current approach and a roadmap to implementation, please reach out to us.
Disclaimer
This publication does not provide any legal advice, and it is for information purposes only. You should not rely upon the material or information in this publication as a basis for making any business, legal, or other decisions. Any reliance you place on such material is therefore strictly at your own risk.
