Crypto crackdown: Why Dubai ordered KuCoin to stop crypto services over licensing issues

KuCoin license issue Dubai: Dubai’s digital asset regulator has taken action against cryptocurrency exchange KuCoin, ordering the company to stop operating in the emirate after determining that it does not hold the required license, as per a report.

Why Dubai Regulator Orders KuCoin to Halt Operations Over Licensing Concerns

The Virtual Assets Regulatory Authority (VARA) said KuCoin Exchange EU GmbH, which operates as KuCoin, has been instructed to cease and desist from providing virtual asset activities in Dubai, as per a Decrypt report. According to the regulator, the company is not authorized to offer digital asset services in the emirate.

Why VARA Says KuCoin May Have Offered Services Without Approval

VARA stated that, “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,” adding, “As a result, the company has been instructed to cease and desist all unlicensed VA activities," as quoted by Decrypt.


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Why Regulator Warns Investors About Risks of Unlicensed Platforms

The authority also warned investors about the risks of dealing with unlicensed platforms. It advised residents not to use KuCoin, noting that engaging with companies that lack proper authorization can expose investors to significant financial risks.

KuCoin Responds, Says EU Entity Focuses Only on European Market

Following the announcement, KuCoin said its operations are carried out through different entities in various jurisdictions. The company explained that KuCoin Exchange EU GmbH operates as a MiCAR-regulated entity focused on the European Union market and does not accept users from outside the EU or conduct marketing activities beyond that region, as per the Decrypt report.

A spokesperson for the exchange told Decrypt that, “Regulatory frameworks for digital assets are developing rapidly across many jurisdictions, and regulators are increasingly clarifying their expectations for the industry,” adding, “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," as quoted in the report.

It remains unclear whether KuCoin will seek the necessary licenses to operate in Dubai.

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FAQs

Why did Dubai order KuCoin to stop operating?

Dubai’s regulator said KuCoin does not have the required license to provide virtual asset services in the emirate.

Which authority issued the warning to KuCoin?

The notice was issued by Dubai’s Virtual Assets Regulatory Authority (VARA).