Dubai regulators noted that no clients were exposed, as FTX MENA was still in the preparation phase before getting fully approved to operate.
The Dubai Virtual Assets Regulatory Authority (VARA) has suspended the license that permits FTX to make preparations to service the local market even though the crypto exchange fiasco continues to make waves in the crypto industry and beyond.
VARA said on its official website that it had cancelled the license for FTX MENA’s Minimum Viable Product (MVP) in the announcement. VARA acknowledged that FTX MENA’s license had been suspended before any clients were revealed, citing the bankruptcy filing of FTX-related firms, including the exchange and Alameda Research.
The regulator stated that FTX MENA was still in the planning stages. The authority made it clear that the company did not yet have the authorization needed to launch its activities and accept clients.
The regulator also emphasized that in order for the company to begin operations in the United Arab Emirates, virtual asset service providers (VASPs) must first establish a domestic bank account.
The regulator has also requested disclosures from VASPs who collaborated with VARA to take part in the regional virtual asset ecosystem. The regulator will then be able to evaluate the exposure of the domestic market and the extent of the contagion within the UAE.
Sam Bankman-Fried, the former CEO of FTX, declared in March that the crypto exchange had been granted Dubai’s first license for digital assets. The MVP program was approved for FTX in July, allowing it to start testing and making preparations.
VARA was established on March 9 as a result of a new regulation that established a legal framework for cryptocurrencies in Dubai. The regulator’s duties include overseeing industry governance standards creation and investor protection.
Bankman-Fried is still giving a speech at a conference that is being held by The New York Times despite the backlash that the defunct FTX exchange has brought to the cryptocurrency world. Members of the cryptocurrency community reacted negatively to this, blaming law enforcement, and some even made comparisons between Bankman-Fried and Alexey Pertsev, the creator of Tornado Cash who is presently in custody.