Dubai’s Virtual Assets Regulatory Authority (VARA) has suspended the licenses of cryptocurrency exchange KuCoin and its associated entities, signaling a firm stance on unlicensed virtual asset activities within the emirate. The move underscores the regulator’s commitment to enforcing compliance and protecting investors from unauthorized financial services.
Crackdown on Unlicensed Operations
In an investor alert, VARA specified that Phoenixfin Pte Ltd, MEK Global Limited, Peken Global Limited, and Kucoin Exchange EU GmbH, all operating under the KuCoin brand, may have been offering virtual asset services to Dubai residents without the necessary license. The authority stated these entities provided misleading information regarding their regulatory status.
VARA emphasized that such activities are in direct violation of UAE laws, including Dubai Law No. 4 of 2022 and Cabinet Resolution No. 111 of 2022. These regulations mandate that all virtual asset service providers (VASPs) must obtain an official license from VARA to operate legally in Dubai.
Investor Protection at the Forefront
The regulator issued a stern warning that any promotion, marketing, or solicitation conducted through the KuCoin platform was unauthorized. It cautioned that engaging with unlicensed platforms exposes users to significant financial and legal risks.
VARA urged Dubai residents to exercise due diligence by verifying that companies are listed in its public register of licensed service providers before conducting any transactions. The authority also encouraged the public to report any suspected unlicensed activity directly to them.
A Pattern of Global Scrutiny
This regulatory action in Dubai is not an isolated incident for the crypto exchange. It follows a recent move by the Austrian Financial Market Authority (AFMA), which froze new operations for KuCoin EU in Vienna. The Austrian regulator cited failures to comply with anti-money laundering (AML), counter-terrorist financing (CTF), and sanctions obligations.
KuCoin Responds to Regulatory Actions
In response to the developments, KuCoin’s European management noted it had voluntarily paused the onboarding of new users and some trading activities to refill critical positions and ensure full regulatory compliance.
A spokesperson for the company stated, “The company operates through multiple entities across different jurisdictions. Regulators may reference specific entities in public notices, but each entity operates within its own regulatory scope.” They affirmed that KuCoin respects “applicable laws and regulatory processes globally,” acknowledging the rapidly evolving nature of digital asset regulations.
About VARA
The Virtual Assets Regulatory Authority (VARA) is the world’s first independent regulator for Virtual Assets. Established in March 2022, it is responsible for licensing and regulating the virtual asset sector throughout the Emirate of Dubai and its free zone territories (excluding DIFC). VARA plays a central role in creating a safe and progressive VA framework that fosters innovation while ensuring market and investor protection.
Source: entarabi
