As the FTX disaster still creates waves in the crypto industry and outside, the Dubai Virtual Assets Regulatory Authority (VARA) has postponed the license which allows FTX to make preparations to service the local market. Dubai regulators distinguished that no clients were exposed as FTX MENA was still in the preparation phase before getting fully permitted to operate.
In a declaration on its official website, VARA cited that it has canceled the approval of FTX MENA’s Minimum Viable Product (MVP) license. Citing the bankruptcy filing of FTX-related entities including FTX exchange and Alameda Research, VARA confirmed that FTX MENA’s license was suspended before any clients were exposed.
The regulator declared, FTX MENA was still in the preparatory phase. The authority explained that the firm had not yet received the approval required to start its operations and onboard clients. In addition, the regulator emphasized that the firm had not yet secured a domestic bank account, which is a requirement for virtual asset service providers to start operations in the United Arab Emirates.
The regulator has also asked VASPs that are involved with VARA to participate in the local virtual asset ecosystem to provide disclosures. This will allow the regulator to assess the domestic market exposure and the scale of the contagion within the UAE.
In March, former FTX CEO Sam Bankman-Fried announced that FTX had acquired the first digital asset license in Dubai. In July, the FTX exchange was approved to operate under the MVP program and conduct testing and production.
In March. On the 9th, Dubai passed a new law that created a legal framework for cryptocurrency, leading to VARA. The regulator works to protect investors and set corporate governance standards
Meanwhile, notwithstanding the attack that the former FTX exchange has brought to the crypto community, Bankman-Fried is still speaking at a meeting hosted by The New York Times. These negative responses among crypto community members criticize law implementation, with some even comparing Bankman-Fried with Alexey Pertsev.
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