Cease-and-Desist Orders and AED 100,000 Fines Issued Amid Regulatory Crackdown.
PC: Dubai World Trade Centre
The Virtual Assets Regulatory Authority has fined seven entities for unlicensed operations in Dubai. This is among other measures to tighten control on the emirate’s virtual asset sector as VARA had issued cease-and-desist orders and fines up to AED 100,000 or $27,000.
Unlicensed Operations and Penalties
The names of the companies that have been sanctioned are not published, but what VARA is doing fits into a continued effort to achieve compliance with local laws governing virtual assets. The fines appear to target companies set up in breach of the strict licensing requirements and marketing regulations by the emirate, which were tightened last month.
It has been crystal clear that the authority will entertain no grey area in the legal framework that will govern Virtual Asset Service Providers. In this way, it can be seen that there is zero tolerance on the part of VARA for such firms failing to comply with regulatory standards, especially those firms operating or whose marketing practices are misleading.
Increased Marketing Regulations
The new fines were the latest of a series of steps taken by VARA to enhance marketing regulations. The rules published now entail safeguarding the transparent and ethical running of virtual asset services, as different entities promote their services without adhering to regulatory requirements set in Dubai.
Tighter rules are coming at a time when the sector of virtual assets is gaining much momentum as Dubai continues to position itself to the world as the go-to global hub for blockchain and cryptocurrency ventures. It is, therefore, touted to hold all Virtual Asset Service Providers to such fortified rules as a means to safeguard the integrity of the sector along with its consumers.
Public Warning and Further Investigations
As a reminder, the Government of Dubai issued a public warning urging individuals and businesses to refrain from dealing, communicating, or conducting business with unlicensed virtual asset service providers. Only VARA-licensed firms are allowed to provide services in or from Dubai.
Further investigation is ongoing, and VARA is currently in collaboration with relevant local authorities to identify entities running afoul of the virtual asset regulations in Dubai and ensuring accountable action. A discovery of this nature augurs more enforcement that may unfold as VARA attempts to bring non-compliant entities to book.
These penalties and cease-and-desist orders are an explicit indication from VARA that Dubai will no longer allow unlicensed operations in its increasingly flourishing virtual assets market. Strengthened marketing regulations and additional investigations are being pursued, as VARA increases efforts to ensure only authorised firms can provide virtual asset services – security and transparency to consumers and businesses alike.
