Crypto-friendly Dubai issues charges against seven entities
The emirate of Dubai, which has taken several measures in recent times to establish and promote itself as a hotspot of Web3 activity, is now identifying illegal crypto entities operating in its region. In the latest development, Dubai’s Web3 governing body has initiated action against seven companies involved in virtual assets. The Virtual Assets Regulatory Authority (VARA) was established in 2022 to ensure all businesses are linked to virtual digital assets (VDAs).
VARA released a statement on the situation this week, claiming that this move is aimed at strengthening its enforcement program against law evaders. However, the authority did not reveal the names of the entities involved.
The reason why these entities have received a penalty payment according to the VARA is that they carry out their activities without obtaining the required approvals.
“VARA will not tolerate attempts to operate without proper licensing, nor will we allow unauthorized marketing of virtual asset activities. Our priority is to ensure that Dubai’s virtual asset ecosystem remains safe for consumers and investors, while remaining a progressive environment for compliant entities.” statement said.
These companies are currently being investigated in Dubai. If found guilty, these companies could face fines ranging from AED 50,000 (approximately Rs. 42 lakh) to AED 100,000 (approximately Rs. 84.09 lakh), among other penalties.
In the backdrop of this situation, VARA has reminded market players that the region’s notoriously volatile virtual asset industry is strictly regulated. In addition, entities wishing to continue offering their services in Dubai have been reminded that they are required to comply with all requirements under the VARA regulations.
“Market enforcement actions send a reinforcing message: VARA will not tolerate attempts to operate without proper licensing, nor will we allow unauthorized marketing of virtual asset activities. Our marketing rules further emphasize Dubai’s commitment to ensuring transparency and always protecting the interests of stakeholders,” the statement said.
The development comes after Dubai granted operational approval to crypto companies including Crypto.com, OKX and Binance, among others.
Since its inception, VARA has made several decisions that take Dubai’s position in the Web3 sector to the next level. While the majority of countries are still in the process of finalizing their respective crypto laws, Dubai released comprehensive crypto laws framed by VARA about two years ago.
In April this year, VARA regulators said that small crypto players in Dubai will receive special benefits, including a cost-effective operational and compliance process for smaller players.
In March 2024, Dubai [prepared] reportedly four rulebooks for crypto service providers, detailing crypto regulations. The emirate has imposed an application fee of $27,000 (approximately Rs. 22 lakh) on crypto companies seeking operational permission.
