Dubai's Crypto Regulator Enforces Penalties on Unlicensed Firms

According to Cointelegraph, Dubai's Virtual Assets Regulatory Authority (VARA) has taken decisive action against 19 companies operating without licenses, imposing financial penalties and issuing cease-and-desist orders. This move underscores VARA's commitment to safeguarding the emirate's burgeoning digital asset ecosystem and mitigating the risks associated with unlicensed crypto activities. The enforcement actions are part of VARA's broader strategy to maintain trust and stability within Dubai's virtual asset market. The regulator emphasized that only firms adhering to the highest standards of compliance and governance are permitted to operate. The penalties were the result of investigations into unauthorized operations, with companies found guilty of offering crypto-related services without approval and violating VARA's marketing regulations. In 2024, VARA had tightened its rules on crypto marketing, mandating disclaimers on promotional materials and requiring prior authorization for promoting products and services to citizens and residents. VARA CEO Matthew White highlighted the importance of responsible service delivery by virtual asset service providers (VASPs), which fosters transparency and trust in the market. The penalized entities were ordered to cease operations and halt any promotion of unlicensed services in or from Dubai, with fines ranging from 100,000 to 600,000 dirhams ($27,000–$163,000) based on the severity of each violation. The enforcement actions are part of a continued effort by VARA to uphold transparency, safeguard investors, and preserve market integrity. This follows a similar crackdown in October 2024, when seven unlicensed crypto entities were fined and issued cease-and-desist orders for breaching regulations. While the United Arab Emirates is recognized as a crypto-friendly jurisdiction, Dubai's regulator remains committed to maintaining a regulated and transparent market through its licensing framework, which aims to balance innovation with robust safeguards for all stakeholders. VARA's announcement serves as a public reminder of the significant legal, financial, and reputational risks associated with engaging with unlicensed crypto operators. Only VARA-licensed entities are authorized to offer crypto services in or from Dubai. This regulatory action is part of broader developments in the region, including VARA's partnership with the Securities and Commodities Authority (SCA) on August 7 to unify the country's approach to crypto regulations. VARA acknowledged Cointelegraph's request for comments on the matter.