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UAE Regulator Suspend FTX's License In The Aftermath Of Exchange's Collapse

  • The broader crypto market is still experiencing the effects of the FTX meltdown.

  • Dubai VARA has revoked the license of the crypto exchange FTX.

24 Nov 2022 By : COIN GABBAR
UAE Regulator Suspen

As the FTX debacle continues to make headlines in the crypto industry and beyond, the Dubai VARA has suspended the license that allows FTX to become a local market service provider.

VARA announced on its official website that it had revoked the approval of FTX MENA's Minimum Viable Product (MVP) license. VARA confirmed that FTX MENA's license was suspended before any clients were exposed, citing the bankruptcy filing of FTX-related entities such as FTX exchange and Alameda Research.

As per regulators, FTX MENA is still in the preparatory stages. The authority clarified that the firm had not yet received the necessary approval to begin operations and accept clients. 

Furthermore, the regulator stated that the company had not yet established a domestic bank account, which is required for virtual asset service providers to begin operations in the UAE.

The regulator has also requested disclosures from VASPs that have partnered with VARA to participate in the local virtual asset ecosystem. This will allow the regulator to assess the extent of the contagion within the UAE and the domestic market exposure.

In March, former FTX CEO Sam Bankman-Fried announced that FTX had received Dubai's first digital asset license. In July, the FTX exchange received approval to operate under the MVP program and begin testing and preparations.

On March 9, a new law was passed in Dubai that established a legal framework for cryptocurrency, resulting in the formation of VARA. The regulator is in charge of protecting investors and developing industry governance standards.

Meanwhile, despite the havoc caused by the former FTX exchange, Bankman-Fried is still speaking at a conference hosted by The New York Times. This elicited negative reactions from members of the crypto community, with some comparing Bankman-Fried to Alexey Pertsev, the currently-detained Tornado Cash developer.

Do you believe other countries will go for a similar course of action? Share your views in the comment section below.

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