Key takeaway: Dubai’s financial regulator has fined 19 crypto companies for offering services without proper licensing, ordering them to stop operations immediately. This action underscores the UAE’s stricter approach to crypto oversight.
What happened?
- The Virtual Assets Regulatory Authority (VARA) in Dubai fined 19 crypto entities that were operating without required licenses.
- Penalties ranged from US$27,000 to US$163,000, depending on how serious each violation was.
- All sanctioned firms were instructed to halt operations and cease promoting unlicensed services in or from Dubai.
Why did VARA take action?
- No license – Many of the penalized firms were providing crypto services without obtaining the necessary VARA license.
- Improper marketing & advertising – These companies also violated new rules about crypto marketing. Under VARA’s 2024 regulations, firms must include disclaimers in promotional material and get prior approval to advertise to UAE customers.
- Risk to consumers – The regulator says unlicensed operators pose financial, legal, and reputational risks to investors and institutions.
Examples of sanctioned firms
Some of the companies fined include:
- UAEC Digital Fintech FZCO
- Morpheus Software Technology FZE (operating as FUZE)
- TON DLT Foundation
- GLEEC DMCC
- UEEX Technology
- LBK Blockchain FZCO
- Triple A Technologies
- Hatom Labs
- Hokk Finance
- Mastercoin DMC
- A to Z Globe DMCC
These firms allegedly failed to satisfy licensing obligations or breached advertising rules.
In one case, Morpheus Software had already been fined earlier for anti-money laundering lapses and governance issues. It accepted the findings and agreed to a remediation plan.
What criteria did VARA use to set fines?
When calculating penalties, the regulator considered:
- The nature and severity of the breach
- The scale of the violation
- The marketing reach (especially if targeting Dubai customers)
- Whether any promotions implied the firm was licensed when it wasn’t
Firms had the chance to appeal before fines were published.
Broader regulatory context in the UAE
- This is not the first enforcement: in October 2024, VARA fined 7 unlicensed crypto firms with penalties from US$13,600 to US$27,200.
- The UAE Securities and Commodities Authority (SCA) joined forces with VARA in August to align federal and emirate-level crypto rules.
- Together, these agencies aim to prevent regulatory gaps and ensure consistent oversight for all crypto service providers in the UAE.
What beginners should understand
- Licensing matters: Only crypto firms licensed by VARA are authorized to legally offer services in or from Dubai.
- Marketing is regulated: Crypto advertising requires prior approval and must include disclaimers to avoid misleading consumers.
- Risk of using unlicensed services: Consumers engaging with non-licensed operators could face financial loss, lack of recourse, or legal issues.
- Appeals are possible: Companies fined get a chance to contest before enforcement becomes public.
- Regulation is tightening globally: Dubai’s recent action mirrors a broader trend of stricter crypto oversight worldwide.
