Dubai’s Virtual Assets Regulatory Authority (VARA) has issued a stark warning to residents, instructing several entities operating under the KuCoin brand to immediately cease all unlicensed virtual asset services within the emirate. In a formal alert issued on Thursday, VARA stated that Phoenixfin Pte Ltd, MEK Global Limited, Peken Global Limited, and Kucoin Exchange EU GmbH—all commercially advertising as KuCoin—may be providing virtual asset activities to Dubai residents without the necessary regulatory approvals and while misrepresenting their licensing status.
Regulator Mandates Immediate Halt to Unlicensed Operations
The regulator emphasized that KuCoin does not hold any license to provide virtual asset services in or from Dubai. VARA instructed these entities to “cease and desist from all unlicensed digital asset activities” effective immediately. Any promotion, advertising, or solicitation related to KuCoin has not been approved by the authority, and the exchange is not permitted to offer, promote, or market virtual asset products or services to Dubai residents.
This action is grounded in Dubai Law No. 4 of 2022 and Cabinet Resolution No. 111/2022, which mandate that all virtual asset service providers (VASPs) must obtain a license from VARA to operate legally within the emirate. VARA confirmed that the activities advertised or conducted by the named KuCoin entities are in direct breach of these regulations and wider UAE legislation.
Consumer Risks and Global Compliance Context
VARA warned consumers that engaging with unlicensed platforms like KuCoin exposes them to “significant financial risks and potential legal consequences,” including violations of regulatory requirements or even criminal laws. The authority urged Dubai-based users to verify that any virtual asset service provider is listed on VARA’s public register of licensed entities before transacting and to report any suspected unlicensed activity directly to the regulator.
This regulatory action follows a separate enforcement move in Europe. Earlier in the week, Austria’s Financial Market Authority (FMA) froze new business at KuCoin’s Vienna-based EU entity, which holds a Markets in Crypto-Assets (MiCA) license. The FMA cited failures to maintain key Anti-Money Laundering (AML), Counter-Terrorist Financing (CTF), and sanctions compliance roles. KuCoin’s European management stated it had voluntarily paused new onboarding and some trading activities while recruiting for the vacant compliance positions to restore full adherence to MiCA standards.
As of publication, Cointelegraph had reached out to KuCoin for comment on the VARA directive but had not received a response. This situation underscores the intensifying global regulatory scrutiny on cryptocurrency exchanges and the critical importance of jurisdiction-specific licensing for platforms seeking to operate legally.
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