Dubai has directed entities operating the KuCoin exchange to halt unlicensed crypto services in the Emirate. In a warning to its investor community, Dubai authorities deemed KuCoin as an unauthorized exchange to engage with.
The Virtual Assets Regulatory Authority (VARA)serves as the crypto sector regulator in Dubai. On Thursday, VARA released an official order saying KuCoin has been misrepresenting its licensing status.
“Any promotion, advertising, or solicitation related to Kucoin has not been approved by VARA, and the company is therefore not allowed to offer, promote, or market any Virtual Asset products or services in Dubai or to its residents,” VARA said.
VARA has laid out a comprehensive set of rules for crypto firms to adhere by. The aim is to keep Dubai’s crypto sector safe for engagement and that the investors are protected against financial risks.
The agency mandates crypto firms to comply with anti money laundering and counter terror financing rules. It requires digital assets players to comply with certain cybersecurity and data protection standards.
Crypto players looking to operate in Dubai must have a physical presence in the Emirate and maintain apt liquidity in its reserves.
In KuCoin’s case, VARA said it holds no licence to offer crypto services in Dubai.
“Engaging with unlicensed companies that are not in compliance with VARA Regulations, associated Rulebooks, and relevant UAE legislation exposes users to significant financial risks and potential legal consequences for violating regulatory requirements, or criminal laws,” VARA warned its investors.
KuCoin, founded in 2017 and headquartered in Seychelles, is touted among the largest exchanges in the world. As per the CoinMarketCap’s index of top spot exchanges, KuCoin holds the eighth position, managing over $3.5 billion worth of user assets.
Last year in January, KuCoin had pleaded guilty of being in breach with the U.S. anti money laundering law and reached a settlement of $300 million with the Department of Justice. The exchange faced similar charges in New York and Canada in recent years and settled the charges with hefty penalties.
As of now, the exchange has not reacted to VARA’s notice.