Dubai’s virtual assets regulator on Wednesday said it issued cease-and-desist orders and fined seven entities for operating without proper licenses and violating marketing rules.
However, the Virtual Assets Regulatory Authority (VARA) did not name the companies involved. The regulator said this announcement serves as a public warning to avoid dealing with unlicensed firms.
“Interacting with such entities exposes individuals and institutions to significant financial and reputational risk, with potential legal consequences for regulatory breach,” it said.
Dubai’s VARA Imposes $13K–$27K Fines on 7 Crypto Entities in Rare Enforcement Move
In this enforcement action, the fines imposed on each entity were between AED 50,000 ($13,612) and AED 100,000 ($27,225), depending on the nature and seriousness of their violations.
This enforcement action is unusual for a city like Dubai, which has been positioning itself as a prime hub for crypto businesses. Recently recognized as the top global destination for crypto enterprises in 2024, Dubai’s appeal stems from its clear regulatory framework, the absence of capital gains tax and affordable licensing fees.
Issuance, Custody and Trading Rules
The city’s efforts to create a crypto-friendly environment make such strict measures stand out.
Entities seeking to provide virtual asset services in or from Dubai must first secure a license from VARA. This applies to activities like Virtual Asset Issuance, Trading Platforms, and Custody Services. They begin by applying for Initial Approval to set up operations and then move on to obtaining a full VASP (Virtual Asset Service Provider) license.
Further, entities must fulfill all regulatory requirements for their planned activities. Virtual Asset Custody Services, for instance, must be kept separate from other operations. Additionally, those engaged in proprietary trading can obtain a No Objection Certificate (NoC) instead of a full license if they meet certain conditions.
As of Oct. 1, 2024, VARA has implemented strict marketing rules for virtual assets. These regulations apply to both Dubai-based entities and foreign companies targeting Dubai residents. Designed to eliminate misleading information, the rules target transparency and fairness in marketing practices.
Source: cryptonews.com