As the FTX debacle continues to create a wave in the cryptocurrency industry and beyond, the Dubai Virtual Assets Regulatory Authority (VARA) has suspended the license that allows FTX to prepare to serve the local market.
In an announcement posted on the official website, VARA mentioned the revocation 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 disclosed.
According to the regulator, FTX MENA is still in the preparatory phase. Authorities explained that the firm has not yet received the approval needed to start operations and attract clients. In addition, the regulator stressed that the firm has not yet secured an internal bank account, which is a requirement for virtual asset service providers to start operations in the United Arab Emirates.
The regulator also asked VASPs that have interacted with VARA to participate in the local virtual asset ecosystem for disclosure. This will allow the regulator to assess the impact on the domestic market and the extent of the contagion in the UAE.
In March, former FTX CEO Sam Bankman-Fried announced that FTX had secured the first digital asset license in Dubai. In July, FTX received an MVP approval and began testing and preparation.
Related: FTX Contagion: Which Companies Affected by the FTX Crash?
On March 9, a new law was issued creating the legal basis for cryptocurrencies in Dubai, leading to the creation of VARA. The regulator is entrusted with the task of protecting investors and creating standards for managing the industry.
Meanwhile, despite the pressure that the former FTX exchange brought to the cryptocurrency community, Bankman-Fried is still speaking at a conference hosted by The New York Times. This caused backlash among members of the cryptocurrency community who are critical of law enforcement, with some even comparing Bankman-Fried to Alexey Pertsev, the currently detained developer of Tornado Cash.