KuCoin ordered to halt unauthorized crypto operations in Dubai
The Virtual Asset Regulatory Authority in Dubai has commanded entities associated with KuCoin to terminate unauthorized virtual asset services, stating the platform lacks proper licensing to operate for Dubai-based users.
The digital asset regulatory body in Dubai has directed the corporate entities operating the KuCoin cryptocurrency exchange to immediately cease unlicensed virtual asset operations within the emirate, issuing a clear warning to investors that the exchange platform does not possess authorization to provide services to individuals residing in Dubai.
Through an investor and marketplace alert issued on March 5, the Virtual Assets Regulatory Authority (VARA) disclosed that Phoenixfin Pte Ltd, MEK Global Limited, Peken Global Limited and Kucoin Exchange EU GmbH, all conducting business under the KuCoin brand, may be delivering virtual asset activities to residents of Dubai, "without the necessary regulatory approvals and misrepresenting its licensing status."
According to VARA, the collection of entities has been ordered to cease and desist from all unlicensed digital asset operations, with the authority emphasizing that KuCoin does "not hold any licence to provide Virtual Asset services in/from Dubai."
The regulatory authority further stated that any virtual asset operations advertised or performed by these entities constitute a violation of VARA regulations as well as broader United Arab Emirates legislation, including Dubai Law No. 4 of 2022 and Cabinet Resolution No. 111/2022, both of which mandate that all virtual asset service providers must obtain proper licensing to conduct business lawfully.
VARA additionally made clear that "any promotion, advertising, or solicitation related to KuCoin has not been approved," and the cryptocurrency exchange is prohibited from offering, promoting or marketing virtual asset products or services within Dubai or to individuals who reside there.
The regulator issued a warning that consumers who choose to engage with platforms operating without proper licenses expose themselves to "significant financial risks and potential legal consequences" stemming from violations of regulatory requirements or potentially even criminal laws.
VARA strongly encouraged individuals based in Dubai to refrain from utilizing KuCoin for virtual asset services, to confirm the licensing status of firms through its public register of licensed providers prior to conducting any transactions, and to submit reports of any suspected unlicensed operations directly to the regulatory authority.
Dubai alert follows Austria freeze on KuCoin EU
The regulatory alert from Dubai arrives on the heels of Austria's Financial Market Authority implementing a freeze on new business activities at KuCoin EU, the entity based in Vienna that possesses a Markets in Crypto-Assets Regulation license, pointing to deficiencies in maintaining critical Anti-Money Laundering, Counter-Terrorist Financing, and sanctions compliance roles.
The European management team at KuCoin indicated that the company had taken the voluntary step of pausing new customer onboarding and certain trading activities during the period in which it works to fill those critical positions and restore the business to complete regulatory compliance.
Cointelegraph reached out to KuCoin for comment but had not received a response by publication.