As the FTX debacle continues to wreak havoc across the cryptocurrency industry and beyond, The Dubai Virtual Assets Regulatory Authority (VARA) has suspended the license that allows FTX to make preparations to serve the local market.
In an announcement posted on his official website, VARA mentioned that it has revoked FTX MENA’s Minimum Viable Product (MVP) license approval. Citing the bankruptcy filings of FTX-related entities, including FTX Exchange and Alameda Research, VARA confirmed that FTX MENA’s license was suspended before any clients were exposed.
According to the regulator, FTX MENA was still in the preparation phase. The authority clarified that the company had not yet received the necessary approval to start its operations and hire clients. Furthermore, the regulator highlighted that the company had not yet obtained a national bank account, which is a requirement for virtual asset service providers to start operating in the United Arab Emirates.
The regulator has also asked virtual asset service providers who have engaged with VARA to participate in the local virtual asset ecosystem to provide information. This will allow the regulator to assess the exposure of the domestic market and the scale of the contagion within the UAE.
In March, the former CEO of FTX, Sam Bankman-Fried, announced that FTX had received the first digital asset license in Dubai. In July, FTX received approval to operate under the MVP program and proceed with testing and preparation.
A new law creating a legal framework for cryptocurrencies in Dubai was enacted on March 9, leading to the creation of VARA. The regulator is tasked with protecting investors and creating rules for the governance of the sector.
Meanwhile, despite the onslaught that the former FTX exchange has brought to the cryptocurrency community, Bankman-Fried is still speaking at a conference hosted by The New York Times. This triggered backlash among members of the cryptocurrency community criticizing law enforcement, with some even comparing Bankman-Fried to Alexey Pertsev, the currently detained developer of Tornado Cash.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.