Dubai Cracks Down on Unlicensed Crypto Operations
Dubai continues to assert itself as a major player in digital assets. The VARA has issued fines against 19 firms operating without licenses, halting their activities and ensuring compliance that safeguards investors.
The Enforcement Division of VARA stated that these actions maintain trust and stability in Dubai’s virtual asset ecosystem, allowing only companies meeting the highest standards of compliance and governance to operate.
Targeted Measures to Safeguard Investors
The penalties resulted from investigations into unauthorized activities. The 19 firms were found to violate VARA’s licensing authority, offering crypto services without approval and breaching VARA’s marketing rules. Firms must include disclaimers and seek prior authorization for advertising to Dubai residents.
VARA CEO Matthew White emphasized that these regulations ensure virtual asset service providers (VASPs) operate responsibly, promoting transparency and trust.
All sanctioned firms were ordered to cease unauthorized operations and promotional activities. Fines started at 100,000 AED and could reach up to 600,000 AED.
In October 2024, VARA similarly fined seven crypto entities for non-compliance with its regulations.
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How VARA Determines Fines
Nicholas McNicholas, head of VARA’s enforcement division, explained that fines are determined by the nature, seriousness, and impact of each breach. Marketing violations are assessed based on the reach and targeting of Dubai customers and any misleading licensing claims.
McNicholas added that firms could appeal penalties before they were finalized, and all sanctioned entities are listed on VARA’s official website for public transparency.
Balancing Innovation and Regulation
While the UAE remains crypto-friendly, VARA emphasizes that strong licensing and regulation are crucial for maintaining market integrity and investor confidence.
Unlicensed crypto operators face significant legal, financial, and reputation risks. Only VARA-licensed firms are permitted to offer digital asset services in or from Dubai.
The crackdown coincides with VARA’s partnership with the Securities and Commodities Authority (SCA) to introduce a common regulatory framework for crypto in the UAE. VARA may take joint action with SCA where appropriate.
The VARA Board Chairman thanked the NFT community for continuing to develop and innovate despite recent market downturns.
