Dubai Crypto Regulator Takes Action Against 7 Firms Operating Without Licenses

Dubai’s Virtual Assets Regulatory Authority (VARA) has fined seven firms for operating without licenses and violating marketing rules. The fines range from $13K to $27K as VARA enforces stricter regulations to protect investors and uphold transparency in the crypto industry.

 Dubai Crypto Regulator Takes Action Against 7 Firms Operating Without Licenses

Dubai Crypto Regulator Takes Action Against 7 Firms Operating Without Licenses

Dubai's Virtual Assets Regulatory Authority (VARA) has issued cease-and-desist orders and fines to seven entities for operating without the necessary licenses and violating marketing regulations. The regulator did not disclose the names of the companies but emphasized that this move serves as a public warning to avoid dealing with unlicensed firms. VARA stressed that interacting with such firms poses significant financial and reputational risks, with potential legal consequences.

VARA Imposes Fines Between $13K and $27K on Crypto Firms

In a rare enforcement action, VARA imposed fines ranging from AED 50,000 ($13,612) to AED 100,000 ($27,225) on each entity, depending on the severity of their violations. This move is unusual for Dubai, a city positioning itself as a global hub for cryptocurrency businesses. In 2024, Dubai was recognized as the top destination for crypto enterprises due to its clear regulatory framework, lack of capital gains tax, and affordable licensing fees.

Licensing Requirements and Marketing Regulations in Dubai

To operate in Dubai, virtual asset service providers (VASPs) must secure a license from VARA. This applies to activities like Virtual Asset Issuance, Trading Platforms, and Custody Services. Entities must first obtain Initial Approval and then complete the process to secure a full VASP license. VARA also requires firms engaged in Virtual Asset Custody to separate their operations from other services. Proprietary trading entities may apply for a No Objection Certificate (NoC) instead of a full license, provided they meet certain conditions.

Since October 1, 2024, VARA has implemented strict marketing rules for virtual assets. These regulations apply to both Dubai-based firms and foreign companies targeting Dubai residents. The aim is to ensure transparency and fairness in marketing practices and eliminate misleading information in the crypto space.


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