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Proxima Eight FZE LLC
Business Centre, Sharjah Publishing City Free Zone, Sharjah, United Arab Emirates
Business Centre, Sharjah Publishing City Free Zone, Sharjah, United Arab Emirates
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What Is the VARA Lending & Borrowing Licence?
Authorises:
- Crypto-backed loans (VA collateral against fiat or VA loans)
- Margin lending for VA trading
- Institutional VA lending desks
- Yield arrangements where the firm acts as counterparty to client deposits
- Peer-to-peer VA lending facilitation
Capital Requirements
Structure
Paid-Up Capital
All cases
Higher of AED 500,000 or 25% of fixed annual overheads
Key Requirements
Risk management
VARA requires documented credit risk, liquidity risk, and collateral management frameworks. Margin call procedures, liquidation protocols, and LTV limits must be stress-tested.
Collateral custody
If you hold VA collateral, Custody Services licence required — or use a VARA-licensed custodian.
Client disclosure
Clear disclosure of lending terms, interest rates, collateral requirements, and liquidation conditions. Enhanced protections for retail clients.
Responsible Individuals
2 RIs - UAE residents, full-time, VARA-approved.
Physical presence
Private office in Dubai required.
What We Do for You
- Activity scopingAssess whether your product is Lending & Borrowing or Management & Investment. Yield products often sit at this boundary.
- Risk frameworkCredit risk, collateral management, LTV policy, liquidation procedures, and stress-testing documentation.
- Custodian structuringThird-party VARA custodian for collateral vs. in-house Custody licence.
- Full ATI and VASP applicationEnd-to-end management.
- AML/KYC frameworkFull AML programme, KYT integration, travel rule compliance.
Frequently Asked Questions
If you hold client collateral directly, yes — or use a VARA-licensed custodian. Most lending platforms use third-party custody for collateral to avoid the additional capital requirement.
Depends on structure. If you act as counterparty (you take client assets and deploy them), Lending & Borrowing typically applies. If you manage client assets with discretion to generate yield, Management & Investment may apply. We assess the specific model.
Fully autonomous decentralised protocols without a controlling legal entity are generally outside VARA's regulatory perimeter. However, the operating company behind a protocol that retains governance control can be licensed. We assess each structure individually.
Related
Start Your VARA Lending & Borrowing Services Licence Process
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Please note: We do not provide any personalized investment advice, token selection guidance, or transaction recommendations. AMLzone is a compliance consultancy and project management services provider, not a Virtual Asset Advisor.
Please note: We do not provide any personalized investment advice, token selection guidance, or transaction recommendations. AMLzone is a compliance consultancy and project management services provider, not a Virtual Asset Advisor.