The Emirate of Dubai, which in recent times has taken multiple measures to establish and promote itself as a hotspot of Web3 activities, is now identifying illegal crypto entities operating within its region. In the latest development, the Web3 governing body of Dubai has initiated an action against seven companies dealing with virtual assets. The Virtual Assets Regulatory Authority (VARA) was formed in 2022 to ensure that all companies are linked to virtual digital assets (VDAs).
VARA released a statement on the situation this week, claiming that this move is aimed at strengthening its enforcement programme against law evaders. The authority, however, has not disclosed the names of the entities in question.
The reason why these entities have been sent cease-and-desist orders, as per VARA, is for operating their businesses without acquiring the required approvals.
“VARA will not tolerate any attempts to operate without appropriate licences, nor will we allow unauthorised marketing of virtual asset activities. Our priority is to ensure that Dubai’s virtual assets ecosystem remains secure for consumers and investors while being a progressive environment for compliant entities,” its statement said.
At present,” probe into these firms is underway in Dubai. If found guilty, these firms can face fines ranging between AED 50,000 (roughly Rs. 42 lakh) and AED 100,000 (roughly Rs. 84.09 lakh), alongside other decided punishments.
In the backdrop of this situation, VARA has issued a reminder to the market players saying that the infamously volatile virtual asset industry is strictly regulated in the region. Moreover, entities looking to continue offering their services in Dubai have been reminded that they are obligated to comply with all requirements as per the VARA rules.
“Market enforcement actions send a reinforcing message: VARA will not tolerate any attempts to operate without appropriate licences, nor will we allow unauthorised marketing of virtual asset activities. Our marketing regulations further emphasise Dubai’s commitment to ensuring transparency and always protecting stakeholder interests,” its statement added.
The development comes after Dubai gave operational approvals to crypto firms, including Crypto.com, OKX, and Binance, among others.
Since coming into existence, the VARA has taken several decisions that elevates Dubai’s position in the Web3 sector. While the majority of nations are still working to finalise their respective crypto laws – Dubai released VARA-framed comprehensive crypto laws around two years ago.
Back in April this year, VARA regulators said small crypto players will get special benefits in Dubai that include cost-effective operational and compliance process for smaller players.
In March 2024, Dubai [prepared] reportedly four rulebooks for crypto service providers, detailing crypto regulations. The Emirate has imposed an application charge of $27,000 (roughly Rs. 22 lakh) for crypto firms seeking operational permissions.