UAE’s regulators are acting on Sam Bankman-Fried’s bankrupt FTX exchange in order to protect local investors. In the latest development, Dubai’s Virtual Assets Regulatory Authority (Vara) has suspended the two-month-old license of FTX Exchange FZE, a subsidiary of FTX Europe and the Middle East division of FTX.
VARA, which serves as the single custodial entity mandated to license and govern crypto activities in Dubai, said it cancelled FTX MENA’s Minimum Viable Product (MVP) license. Additionally, it confirmed that no local clients were exposed after a liquidity constraint led to a withdrawal hold, citing the bankruptcy filings of associated entities such as FTX exchange and Alameda Research.
VARA clarified that the embattled exchange’s MENA subsidiary was still in the preparation phase prior to receiving full operating approval. However, FTX former CEO SBF said earlier this month that the exchange was awarded Dubai’s first Minimal Viable Product (MVP) license, allowing full operation in the region.
FTX, during its minimum viable product (MVP) phase, was allowed to offer its services only to qualified retail investors, accredited investors and institutions. A month earlier, rival exchange Binance has obtained a similar approval after securing a provisional license last March.
FTX is already facing the suspension of its licence by several regulators, revoking its ability to continue trading within these jurisdictions. Most recently, Australian Securities and Investments Commission (ASIC) halted the AFS license of FTX Australia Pty Ltd until May 15, 2023.
Following two weeks of turmoil for the exchange which collapsed in dramatic fashion, Cyprus’s CySEC also suspended FTX.com’s CIF license, which allowed the insolvent platform to operate throughout Europe over the last few months.
The Cyprus branch, called FTX Europe, was among companies in FTX Group 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 US business, FTX.us, as well as 130 additional sister companies are part of the bankruptcy proceedings.