New UAE Regulations Signal a Turning Point for ESG in Digital Assets
How VARA’s ESG Mandates Create a Strategic Opportunity for VASPs, and Why Carbonmark is Here to Help
On 19 May 2025, the Dubai Virtual Asset Regulatory Authority (VARA) published a new section of its Company Rulebook introducing tiered ESG disclosure requirements for all licensed Virtual Asset Service Providers (VASPs). This includes everything from voluntary reporting guidance to mandatory ESG disclosures tied directly to license conditions. This marks a new phase in the UAE’s digital asset regulation — one where sustainability, transparency, and climate accountability are no longer optional.
At the same time, the UAE’s Federal Decree-Law of 2024 on Climate Change lays the groundwork for mandatory emissions disclosures, a National Carbon Registry, and carbon offsetting across sectors, including digital assets. Explore our in-depth analysis of the climate law in the recent “UAE’s Landmark Climate Law and Its Game-Changing Impact on Voluntary Carbon Markets” blog post.
Taken together, these frameworks establish the UAE as a global leader in climate-aligned finance and set a clear new standard for VASPs operating or planning to operate in the region.
Who Must Comply? A Look at Dubai’s Active VASPs
Whether you’re a crypto exchange, staking platform, broker-dealer, DeFi protocol, or custody provider, if you’re licensed or seeking to be licensed in Dubai, you’ll be required to comply with ESG rules. Here are examples of active VASPs in Dubai, grouped by activity category:
1. Broker-Dealer Services
VASPs facilitating asset trades and token issuance are required to report how their activities impact climate and governance transparency.
Examples: Bitpanda Broker MENA DMCC, Ctrl Alt Solutions DMCC, CoinMENA FZE.
2. Exchange Services
VASPs operating centralized or decentralized exchanges must disclose energy use, emissions data, and mitigation strategies — particularly for high-volume or derivatives trading.
Examples: OKX Middle East Fintech FZE, Deribit FZE, Mantra Finance FZE, Gate.io (Gate Technology FZE).
3. Custody Services (incl. Custodial Staking)
Custodians are expected to report ESG controls over security infrastructure, data center emissions, and any energy use from staking.
Examples: Bitpanda Custody MENA DMCC, Hex Trust MENA FZE, Komainu MEA FZE.
4. Management and Investment Services
Firms offering investment or lending services must disclose ESG investment policies, carbon impacts of treasury operations, and potential exposure to ESG risks.
Examples: OKX Middle East Fintech FZE, Crypto.com (Foris DAX Middle East FZE), Nine Blocks Capital Management FZE
5. Lending & Borrowing Services
VASPs engaged in crypto lending or borrowing must report how funds are allocated, how ESG risk is managed, and what emissions result from supported infrastructure.
Examples: Binance FZE, Crypto.com (Foris DAX Middle East FZE), OKX Middle East Fintech FZE
6. Multi-licensed, Full-Scope VASPs
These firms are licensed for multiple high-impact activities, including exchange, custody, investment, and lending. They fall under VARA’s highest ESG disclosure tier.
Examples: Binance FZE, OKX Middle East Fintech FZE, Mantra Finance FZE, Foris DAX Middle East FZE (Crypto.com)
VARA maintains an official public register of VASPs with full license and activity scope. Each of these VASPs now has clear compliance expectations under VARA’s ESG rulebook. Failure to meet disclosure requirements can impact their license status, client trust, and operational permissions.
What VARA’s ESG Rulebook Requires
VARA’s Company Rulebook (Part V) outlines three tiers of ESG disclosure:
Voluntary Disclosures — For early-stage or small VASPs
Compliance Disclosures — Mid-size providers must document ESG governance
Mandatory Disclosures — For large VASPs or those operating data-intensive services like exchanges, custody, or mining
These disclosures must cover:
Environmental impact from operations (including staking, custody, trading)
Governance practices related to ESG risks
Public-facing transparency, often via a dedicated webpage
Emissions mitigation or carbon offsetting strategies
Carbon Credits: A Key Component of Staying Compliant
For many VASPs, full decarbonization of operations is impractical. That’s where high-quality carbon credits come in.
As part of an ESG or emissions mitigation strategy, purchasing and retiring verified carbon credits allows VASPs to:
Offset emissions from trading infrastructure, node operations, or custody services
Demonstrate good-faith effort toward net-zero operations
Enhance ESG reports submitted to VARA or published publicly
At Carbonmark, we enable that strategy with blockchain-enabled carbon credit purchasing, automated retirement tracking, and transparent reporting tools.
Why Carbonmark?
As a UAE-based tokenized carbon credits marketplace, Carbonmark bridges the gap between blockchain-native innovation and real-world climate action.
We offer:
Carbon emissions analysis for data-intensive crypto activities
Access to verified carbon credits to offset operational emissions
Integration-ready ESG reporting tools to support VARA compliance
A direct connection to blockchain-enabled carbon markets, ensuring traceability and transparency
The Strategic Advantage of Early Action
VASPs who engage early with ESG readiness will be ahead of the curve, both from a regulatory compliance standpoint and in terms of brand positioning with institutional partners, investors, and users who increasingly demand climate accountability.
At Carbonmark, we believe ESG is not just a compliance obligation. It’s a strategic differentiator for forward-looking digital asset platforms.
Let’s Talk
Whether you're preparing for a VARA license application or want to assess your emissions and offset strategies, Carbonmark can help you turn ESG obligations into meaningful, measurable action.
Connect with our Solutions Team to explore how we can help your team get ESG-ready.
