Dubai’s Virtual Assets Regulatory Authority (VARA) issued a warning to investors about crypto exchange MEXC. According to VARA, MEXC is not licensed to operate in Dubai. They also urged Dubai residents and companies to verify regulatory approvals before using virtual asset services.
VARA also stated that MEXC operates through two entities. These are MEXC Estonia OU and MEXC Global LTD. Both of these companies operate under the name MEXC. VARA stated that neither of these companies was approved to provide virtual asset services within Dubai.
Any activities that are related to MEXC within Dubai are illegal. These include promotion, advertisement, or solicitation of services. VARA said that the company cannot market or offer products to Dubai residents.
VARA Flags MEXC Compliance Issues
VARA noted that the company does not comply with any of the requirements that are set by Dubai Law No. 4 of 2022. It also does not comply with Cabinet Resolution No. 111 of 2022. These are laws that are applicable to all virtual asset service providers operating in Dubai.
The authority clarified that no promotional activity regarding MEXC has been approved. Therefore, the platform cannot advertise or promote its services in Dubai.
However, the use of such platforms can result in severe financial risks for the users. There are also chances of facing legal issues. The officials have asked investors to check the Public Register.
According to the officials, the Public Register includes all the approved virtual asset service providers. The register enables users to check if a company is authorized to operate or not. This helps users avoid facing financial activities that are not regulated.
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Earlier in the same day, VARA had issued an alert regarding KuCoin, which is a crypto exchange platform. The alert also included other companies that were associated with KuCoin’s activities. These companies include Phoenixfin Pte Ltd, MEK Global Limited, Peken Global Limited, and KuCoin Exchange EU GmbH.
VARA Issues Similar Warning Over KuCoin Operations
These companies may also be providing virtual asset services in Dubai without proper approval. The promotion of any activities related to KuCoin has not been authorized by the regulator. People who deal with KuCoin may face financial and legal consequences.
There have been instances of KuCoin facing regulatory challenges in other countries as well. The Financial Market Authority in Austria has stopped KuCoin EU from undertaking any new business activities due to concerns over anti-money laundering regulations and sanctions.
As per the report, a trader in Canada is not able to access his money, which amounts to around 2.8 million CAD, stored on KuCoin. This has continued for over eight months. These are some of the issues being monitored regarding crypto exchanges around the world.
VARA has stated that the purpose of its warnings is to protect investors and ensure compliance with the regulatory framework within Dubai. Crypto companies are still being monitored globally. Residents are advised not to invest through unlicensed crypto exchanges such as MEXC.
Also Read: Dubai Regulator Issues Warning Against KuCoin Over Alleged Unlicensed Crypto Services