Dubai regulator fines 19 crypto firms for licensing breaches
Dubai's Virtual Assets Regulatory Authority (VARA) has imposed fines on 19 cryptocurrency companies for operating without licenses and violating marketing rules. Penalties range from $27,000 to $163,000, with orders to halt operations immediately. The crackdown aims to protect consumers and ensure regulatory compliance in the emirate's digital asset sector.
VARA announced fines against 19 entities for offering cryptocurrency services without the required approvals and for breaching marketing regulations introduced in 2024. The penalized firms include UAEC Digital Fintech FZCO, Morpheus Software Technology FZE (operating as FUZE), TON DLT Foundation, GLEEC DMCC, UEEX Technology and LBK Blockchain FZCO, Triple A Technologies, Hatom Labs, Hokk Finance, Mastercoin DMC, and A to Z Globe DMCC, among others.
All companies received directives to immediately cease operations and stop promoting unlicensed services in or from Dubai. Nicholas McNicholas, head of enforcement at VARA, stated that fine amounts are determined by evaluating "the nature, seriousness and impact of each violation, plus specific circumstances of advertising activities." For marketing breaches, VARA considers the level and scale of targeting Dubai customers, including any misleading information suggesting proper licensing.
The 2024 marketing rules require disclaimers on promotional materials and prior authorization before targeting citizens and residents. VARA CEO Matthew White has emphasized that these requirements "compel virtual asset service providers to deliver services responsibly, fostering transparency and trust," while protecting consumers from misleading or fraudulent promotions.
One firm, Morpheus Software Technology FZE, had previously been fined for anti-money laundering violations and governance failures. It accepted VARA's findings, submitted a remediation plan, and agreed to an independent compliance monitor.
VARA warned that engaging with unlicensed operators poses significant legal, financial, and reputational risks. Only VARA-licensed entities may offer crypto services in or from Dubai. In August, VARA partnered with the UAE Securities and Commodities Authority to unify national cryptocurrency regulations, closing gaps between federal and emirate-level oversight.