As the FTX debacle continues to make waves in the crypto industry and beyond, Dubai’s Virtual Asset Regulatory Authority (VARA) has suspended the license that allows FTX to prepare to serve the local market.
In the announcement posted on its official website, VARA said it has revoked FTX MENA’s Minimum Viable Product (MVP) license approval. With reference to declaration of bankruptcy for entities connected with FTX including the FTX exchange and Alameda Research, VARA confirmed that FTX MENA’s license was suspended before the clients were revealed.
According to the regulator, FTX MENA was still in the preparatory phase. The office clarified that the company has not yet received the necessary approval to start operations and connect clients. In addition, the regulator highlighted 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 UAE.
The regulator has also asked VASP providers that have partnered with VARA to engage with the local virtual asset ecosystem to provide input. This will allow the regulator to assess domestic market exposure and the extent of contagion in the UAE.
In March, former FTX CEO Sam Bankman-Fried announced that FTX has received its first license for digital assets in Dubai. In July, the FTX exchange was allocated consent to operate within the MVP program and continue testing and preparations.
On March 9, a new law was issued that created the legal framework for crypto in Dubai, leading to the creation of VARA. The regulator is is meant to protect investors and creating standards to govern the industry.
Meanwhile, despite the onslaught the former FTX exchange has brought to the crypto community, Bankman-Fried is still speaking at a conference hosted by The New York Times. This caused negative reactions among members of the crypto community critical of law enforcement, with some even comparing Bankman-Fried to Alexey Pertsev, currently detained developer from Tornado Cash.