Dubai’s VARA Issues Warning Against KuCoin Over Unlicensed Virtual Asset Activities

TLDR

• Dubai VARA orders KuCoin entities to halt unlicensed crypto services.
• Regulator says KuCoin lacks authorization to operate in or from Dubai.
• Several KuCoin-linked firms accused of targeting Dubai residents.
• Dubai’s 2022 crypto law requires licensing before offering services.
• KuCoin also faces compliance scrutiny from regulators in Europe.

Dubai’s virtual asset regulator has moved against crypto exchange KuCoin after identifying unlicensed activities targeting residents. The Virtual Assets Regulatory Authority, known as Vara, ordered the entities behind the platform to halt services immediately. Vara stated that KuCoin lacks authorization to offer virtual asset services within or from Dubai.

Vara Orders KuCoin Entities to Stop Unlicensed Activities

Vara identified several companies operating under the KuCoin brand while targeting Dubai users. These include Phoenixfin Pte Ltd, MEK Global Limited, Peken Global Limited, and Kucoin Exchange EU GmbH. Vara determined that these entities may have provided virtual asset services without required regulatory approval.

Authorities directed the companies to stop all unlicensed operations in the emirate. Vara stated that the entities may have misrepresented their regulatory standing while advertising services locally. The regulator classified their activities as breaches of the emirate’s virtual asset regulations.

The regulator also confirmed that KuCoin holds no license to operate virtual asset services in or from Dubai. Vara explained that any platform activity directed toward Dubai residents violates regulatory rules. The authority issued a formal cease-and-desist instruction against the group.

Regulatory Framework Governing Virtual Asset Services in Dubai

Dubai introduced a formal regulatory framework for digital assets through Dubai Law No. 4 of 2022. The legislation established Vara as the authority supervising virtual asset activities in the emirate. All providers must secure approval before offering services within the jurisdiction.

Cabinet Resolution No. 111 of 2022 reinforced these requirements across the United Arab Emirates. The resolution mandates that every virtual asset service provider obtain proper licensing before operating. Vara therefore monitors compliance to maintain market integrity and regulatory oversight.

Authorities noted that KuCoin does not meet these legal licensing requirements. Vara therefore classified the company’s advertised activities as unauthorized under the emirate’s rules. The regulator also stated that no KuCoin promotions or advertisements received official approval in Dubai.

Compliance Concerns Expand Beyond Dubai

The Vara alert follows additional compliance developments involving KuCoin operations in Europe. Austria’s Financial Market Authority recently froze new business activities at KuCoin EU in Vienna. The authority cited shortcomings in anti-money laundering and sanctions compliance functions.

The European entity had secured authorization under the European Union’s Markets in Crypto-Assets regulation framework. However, regulators determined that the firm lacked key compliance staff responsible for financial monitoring roles. Authorities therefore halted new customer onboarding and some trading activities.

KuCoin’s European management responded by pausing certain services while addressing regulatory requirements. The company stated it would refill compliance positions and restore operational standards. Vara continues monitoring potential virtual asset activities involving Dubai residents.

Dubai established Vara to supervise virtual asset markets and maintain regulatory clarity. The authority oversees licensing, monitoring, and enforcement across most of the emirate’s digital asset sector. The Dubai International Financial Centre remains regulated under a separate framework.

Regulators continue strengthening oversight as global crypto activity expands rapidly. Vara aims to ensure that companies operating in Dubai follow established licensing and compliance requirements. The authority uses enforcement actions to address platforms operating without authorization.

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