The Dubai Virtual Assets Regulatory Authority (VARA) has confirmed the suspension of the license which permits FTX to make preparations for servicing the local market, as reported by Cointelegraph.
According to Cointelegraph, through an announcement on VARA’s official website, the platform mentioned about revoking FTX MENA’s Minimum Viable Product (MVP) license approval. On account of the bankruptcy filing of FTX-based entities including FTX exchange and Alameda Research, VARA highlighted about taking the step prior to any client being exposed.
On the basis of information by Cointelegraph, FTX MENA was still at a developmental phase. The authority gave the clarification about the firm not receiving the approval needed to begin its operations and onboard clients. Further, the regulator emphasised about the firm not having a domestic bank account, which is needed by virtual asset service providers to start operations in the United Arab Emirates. The regulator even approached VASPs that engaged with VARA to take part in the local virtual asset ecosystem for providing disclosures. It is believed that the step will permit the regulator to assess the domestic exposure and scale of the contagion within the UAE.
Moreover, Cointelegraph noted that on March 9, 2022, a new law was designed for developing a cryptocurrency legal framework in Dubai was issued, which led to the creation of VARA. Reportedly, the reporter has responsibilities of protecting investors and creating standards with regard to industry governance.
(With insights from Cointelegraph)