Dubai is keen to promote blockchain technology without prejudicing its residents. It is in this context that the licensing process for FTX has been suspended by the Virtual Assets Regulatory Authority (VARA). Last month, Sam Bankman-Fried (SBF), FTX’s former CEO, enthusiastically hinted that his company’s subsidiary was on track to operate in Dubai. That was before the exchange collapsed.
No license for FTX in Dubai
The fallout from the FTX collapse continues to fuel the world’s crypto news. While the process FTX initiated to expand its operations in Dubai was still underway, the Dubai Virtual Assets Regulatory Authority (VARA) revoked FTX MENA‘s minimum viable product (MVP) license. The decision was prompted by the negative track record of FTX-related entities, a VARA statement said. In addition, the Dubai crypto regulator has invited other crypto service providers to share their balance sheets.
According to the regulator, FTX was not legally established in Dubai when it fell. In fact, the company had not yet obtained the required approvals to operate in the local market. As proof, FTX did not even have a bank account in the United Arab Emirates, a requirement for virtual asset service providers (VASPs), the regulator recalls.
Last month, Sam Bankman-Fried, FTX’s former CEO, seemed to say otherwise. On Twitter, SBF said it was excited to be working in Dubai, a city with regulations conducive to innovation and customer protection.
FTX is thrilled to be regulated in Dubai by VARA! We are excited to expand our presence in the city and work with the regulators who have taken the lead in establishing a regulatory framework for digital assets, protecting customers and enabling innovation.SBF at the time
The United Arab Emirates were indeed affected by the fall of FTX
Despite the fact that FTX was not legally authorized to operate in the United Arab Emirates as evidenced by the VARA, several citizens of the country were indeed using the platform. At least that’s what CoinGecko revealed. According to CoinGecko, the UAE has nearly 80,000 monthly users on FTX. This represents 1.6% of the traffic on FTX and makes the UAE the 21st most affected country by the exchange’s fall.
This episode is another reminder of the nature of crypto: decentralized and borderless. As long as people have access to the internet, it is impossible to prohibit them from using crypto. This is a major asset in states like Nigeria where crypto is the alternative to inflation and economic collapse. Above all, this freedom is a call for investors to be responsible. Because no one can stop them, investors are entirely in control of their funds.
Since its establishment last March, the Virtual Assets Regulatory Authority (VARA) has been spearheading the development of crypto in Dubai. The suspension of the licensing process for FTX is a customer protection measure, not a hindrance to digital innovation. Crypto remains widely used and accepted locally. Whether with private parties like this luxury hotel or state actors. It is also the reason why part of the Coinpri team and even the company are based here!
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.