Dubai Orders Crypto Exchange KuCoin to Stop Offering Services to Residents
TL;DR
Dubai's VARA ordered KuCoin to stop unlicensed crypto services to residents, citing regulatory violations and financial risks. KuCoin claims it operates only in the EU, while MEXC also received a warning.
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Dubai’s digital asset regulatory body has ordered Kucoin Exchange EU Gmbh—operating as Kucoin—to cease and desist its operations in the emirate, according to a Friday announcement.
The Virtual Assets Regulatory Authority (VARA) said that the cryptocurrency exchange does not hold a license to provide digital asset services within Dubai, and is therefore not authorized to operate there.
“It has come to VARA's attention that the company [KuCoin] may be providing Virtual Asset activities to Dubai residents without the necessary regulatory approvals and misrepresenting its licensing status,” the notice reads. “As a result, the company has been instructed to cease and desist all unlicensed VA activities.”
The regulator’s announcement warns investors that engaging with unlicensed companies can pose “significant financial risks” and advises them not to utilize KuCoin.
In response to the news, KuCoin indicated that it operates via various entities in different geographic jurisdictions, saying KuCoin Exchange EU GmbH “operates as a MiCAR-regulated entity focused on the European Union (EU) market” and does not accept non-EU users or conduct marketing activity outside the area.
“Regulatory frameworks for digital assets are developing rapidly across many jurisdictions, and regulators are increasingly clarifying their expectations for the industry,” a spokesperson for the firm told Decrypt. “KuCoin respects applicable laws and regulatory processes globally and maintains a cooperative approach with regulators while supporting the development of a responsible digital asset ecosystem.”
It is not immediately clear whether or not the exchange will seek the appropriate regulatory licenses to operate in the emirate, and a representative did not immediately respond to Decrypt’s inquiry.
In addition to KuCoin, crypto exchange MEXC was issued a similar warning notice by the regulator on March 4. However, the regulator did not formally request that the firm cease and desist services, despite indicating that MEXC is “not allowed to offer or promote” virtual asset services in the emirate.
A representative for MEXC did not immediately respond to Decrypt’s request for comment.