The Emirates of Dubai recently took several measures to establish and enhance itself as a hotspot for Web3 activities and is now identifying illegal crypto entities it operates within its region. In the latest developments, Dubai’s Web3 management agency has filed lawsuits against seven companies dealing with virtual assets. The Virtual Assets Regulatory Authority (VARA) was established in 2022 to ensure that all companies are linked to Virtual Digital Assets (VDA).
Vara issued a statement this week claiming the move is intended to strengthen its enforcement plans for legal evasioners. However, authorities have not disclosed the name of the entity concerned.
According to Vara, the reason for the suspension of orders has been sent to these entities is to operate their business without obtaining the required approval.
“VARA will not tolerate any attempt without proper permission and will not allow unauthorized virtual asset campaign marketing. Our priority is to ensure Dubai’s virtual asset ecosystem remains safe for consumers and investors while becoming a joint venture. environment for progressive entities.”
Currently, Dubai’s investigation of these companies is underway. If found guilty, these companies could face fines of Dh50,000 (about Rs 42 lakh) and Dh100,000 (about Rs 84.09 lakh) as well as punishments for other decisions.
Against this backdrop, Vara reminded market participants that the infamous virtual asset industry is strictly regulated in the region. In addition, entities wishing to continue providing services in Dubai are reminded that they are obliged to comply with all requirements in accordance with VARA rules.
“The Market Enforcement Action sent a strengthening message: Without proper permission, VARA will not tolerate any attempts to operate and will not allow unauthorized virtual asset campaign marketing. Our marketing regulations further emphasize Dubai’s efforts to ensure transparency and Commitment to always protect the interests of stakeholders.”
After Dubai provided operational approval for cryptocurrency companies including Crypto.com, Okx and Binance, among others.
Since its inception, VARA has made several decisions to enhance Dubai’s position in the Web3 division. Although most countries are still working to finalize their respective cryptography, Dubai released the Vara framework integrated cryptography about two years ago.
Back in April this year, VARA regulator said small cryptocurrency players will receive special benefits in Dubai, including cost-effective operational and compliance processes for small players.
According to reports, in March 2024, Dubai (Prepared) provided four rulebooks for crypto service providers, detailing the encryption regulations. The emirates imposed a filing fee of US$27,000 (approximately Rs 22 lakh) on cryptocurrency companies seeking operational licenses.
