Dubai’s Virtual Assets Regulatory Authority (VARA) has issued alerts for seven crypto entities claiming to be registered and licensed in Dubai. The entities include, Koto Crypto, Finchain, Crypto Force, Coin Cashy, BTC Bay, XT.com, and Stabit.
The first entity, Koto Crypto based out of DMCC (Dubai Multi Commodities Center) which claims to be registered in DMCC Dubai, is carrying out non regulated virtual asset activities operating without a proper license. Based on press releases from Koto Crypto, they have been operating in Dubai as an OTC Crypto provider since 2023.
As per the notice, “Any activities related to virtual assets conducted on this platform are therefore not in compliance with VARA Regulations. Engaging with unlicensed platforms that are not in compliance with VARA Regulations exposes users to significant financial risks and potential legal consequences for violating regulatory requirements, or criminal laws.”
The same applies to Finchain Payment Service Provider L.L.C. and Finchain Technologies DMCC, which also claim to be registered in DMCC. Moreover, the Finchain website is no longer operational, claiming they are undergoing maintenance.
Vara also mentioned Crypto Force, which is registered in DMCC and conducting unregulated virtual asset activities. In addition, VARA issued alerts for Coin Cashy, BTC Bay, whose website is no longer active.
As for the 7th crypto entity put under alert status, Stabit, which is associated with Genesis Digital Assets Commercial Brokers Co. L.L.C, also offering un-regulated crypto trading services.
XT.com was recently hacked for $1.7 million
XT (XT.com), one of the non-regulated crypto entities under the VARA alert, with almost half a million followers on X, recently suspended withdrawals on November 28th, after suspecting $1.7 million hack. The exchange suspended withdrawals, citing “wallet upgrade and maintenance.”
The statement was issued about an hour before blockchain security firm PeckShield reported that XT.com “appeared to have been hacked” for $1.7 million worth of cryptocurrency. XT.com subsequently issued a statement acknowledging an “abnormal transfer of platform wallet assets.”
The exchange tried to assure users that they would not be affected. According to PeckShield data, the suspected XT.com hacker had already swapped funds stolen from the exchange for 461.58 Ether.
VARA calls on users not to deal with these 7 entities
All these entities are unlicensed as per VARA and, as such, are not operating legally in the jurisdiction. As such any promotion, advertising, or solicitation related to these seven entities has not been approved by VARA, and the platform is therefore prohibited from offering, promoting, or marketing any virtual asset products or services in Dubai or to its residents.
VARA advised investors and consumers to avoid using them and to exercise caution when considering interactions with unregulated platforms.
The regulator also notified users that access to these websites might be restricted without prior notice. As per the regulator, “It is recommended to take immediate necessary measures to ensure protection of user assets.”
The alerts come after VARA announced in October that it issued cease-and-desist orders, along with accompanying fines, to 7 entities for operating without the required licenses and for breaching marketing regulations.
VARA fines 18 entities for failing to comply with regulations
On November 17th 2023, VARA shared that 18 Virtual Asset Service Providers (VASPs), commercially licensed on mainland under Dubai’s Department of Economy and Tourism (DET) have thus far, been issued fines for failing to comply with VARA’s directives and regulatory guidance.
As per the regulator, these enforcement actions are a pre-requisite to remedy compliance breaches and assure global markets that VARA’s regime can be trusted to have consistency and resilience in deployment.
The Dubai regulator noted that if these regulatory gaps are not actively addressed by year-end, further penalties will apply.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear 