UAE regulators are acting on Sam Bankman-Fried’s bankrupt FTX exchange to protect local investors. In the latest development, the Dubai Virtual Assets Regulatory Authority (Vara) suspended the two-month license of FTX Exchange FZE, a subsidiary of FTX Europe and the Middle East division of FTX.
VARA, which serves as the sole custodian entity mandated to license and govern crypto business in Dubai, said it has revoked FTX MENA’s Minimum Viable Product (MVP) license. Additionally, he confirmed that no local clients were exposed after a liquidity constraint led to a suspension of withdrawals, citing bankruptcy filings from associated entities such as FTX Exchange and Alameda Research.
VARA clarified that the MENA subsidiary of the troubled exchange was still in the preparation phase before receiving full operating approval. However, former FTX CEO SBF said earlier this month that the exchange had secured Dubai’s first minimum viable product (MVP) license, enabling complete operation in the region.
FTX, during its Minimum Viable Product (MVP) phase, was only licensed to offer its services to qualified retail investors, accredited investors, and institutions. A month earlier, rival exchange Binance gained similar approval after securing a provisional license last March.
FTX is already facing suspension of its license by several regulators, revoking its ability to continue trading in those jurisdictions. Most recently, the Australian Securities and Investments Commission (ASIC) suspended the AFS license of FTX Australia Pty Ltd until May 15, 2023.
After two weeks of turmoil for the exchange which collapsed in dramatic fashion, Cyprus CySEC also suspended FTX.com’s CIF license, which allowed the insolvent platform to operate across Europe. over the past few months.
The Cypriot branch, called FTX Europe, was among the FTX Group companies that filed for bankruptcy after the Sam Bankman-Fried-led exchange collapsed. The company, once valued at $32 billion earlier this year, said its crypto trading arm, Alameda Research, and its US business, FTX.us, along with 130 additional sister companies were part of the bankruptcy proceedings. .