Dubai’s crypto regulator, Virtual Assets Regulatory Authority (VARA), has flagged KuCoin for allegedly operating without a licence. The watchdog has ordered the exchange to halt all digital asset services in Dubai, citing investor risks.
VARA Orders KuCoin to Halt Unlicensed Operations
Crypto exchange KuCoin is facing increased scrutiny in Dubai, based on allegations of violating compliance rules. The Virtual Assets Regulatory Authority has found that the company has been providing services to its customers in the region illegally. This means that the exchange reportedly hacked a valid license to operate in Dubai. The statement read,
On Thursday, VARA sent an alert to KuCoin and the related companies- Phoenixfin Pte Ltd, MEK Global Limited, and Peken Global Limited. As per the regulator’s statement, these companies, which operate under the name of KuCoin, lack proper registration.
As a consequence, the watchdog ordered the platforms to stop offering any unregistered services to their clients. The regulator said any crypto activities by these companies break VARA rules and UAE laws.
“Any promotion, advertising, or solicitation related to Kucoin has not been approved by VARA, and the company is therefore not allowed to offer, promote, or market any Virtual Asset products or services in Dubai or to its residents,” added the statement. Under Dubai Law No. 4 of 2022 and Cabinet Resolution No. 111/2022, all virtual asset service providers must be licensed to operate legally.
It is worth noting that this increased scrutiny on KuCoin comes amid the escalating conflicts in the Middle East. As CoinGape reported, more Gulf countries are being impacted by the ongoing US-Iran war.
In addition, the regulator warned that using unlicensed crypto platforms puts consumers at critical financial risk. So, VARA cautioned the crypto community to be vigilant and strictly use registered companies.
Unveiling VARA’s Role in Dubai’s Crypto Market
Dubai has been steadily tightening its rules on digital assets as part of the city’s vision of establishing a crypto hub. The city mandates every crypto company to hold a valid crypto license to serve its customers in the region.
Companies must comply with strict guidelines covering licensing, security, transparency, and investor protection, and any breach can trigger regulatory action, including cease-and-desist orders or fines.
The city is also fostering major crypto developments. For instance, Dubai is becoming a global centre of tokenized properties. The Dubai Land Department and Ctrl Alt have formed a partnership with Ripple to develop a diamond tokenization system that will operate on the XRP Ledger blockchain. The statement demonstrates that Dubai continues to be an international innovation leader while it supports regulated blockchain development.
Source: https://coingape.com/kucoin-hit-with-vara-alert-for-unlicensed-crypto-services/
