Dubai’s Virtual Assets Regulatory Authority (VARA) has ordered crypto exchanges MEXC, KuCoin, and their affiliates to immediately cease all “unlicensed” activity in the region.
In a public statement, the regulator said that MEXC affiliates do not hold a VARA license. It also warned investors that engaging with the exchange exposes them to financial risk and legal consequences.
Source: X/VARA
Interestingly, the Friday warning against MEXC followed a similar move against KuCoin. On Thursday, the agency issued a stern warning to KuCoin and its users in the region.
“VARA advises consumers and investors in Dubai to avoid engaging with Kucoin or the purpose of Virtual Asset services, and to exercise caution when considering interactions with unregulated entities.”
Dubai intensifies crackdown on crypto activity
Dubai has positioned itself as a crypto-friendly jurisdiction, but only to firms that adhere to its compliance framework. In October 2025, the regulator fined 19 firms for operating unlicensed crypto activities, slapping each with penalties ranging from $27k to $ 163k.
Although most firms tend to resume operations after receiving regulatory approval, the latest crackdown coincided with Iran’s escalations and a sharp increase in crypto activity across the broader region.
The UAE is the second-largest crypto market in the Middle East and North Africa (MENA) region, after Turkey. It saw $53 billion in crypto flows as of June 2025.
Source: Chainalysis
However, recent tensions have led to a notable 700% surge in crypto activity across Iran, both from Iranian citizens and the government. Crypto has become one of the alternatives for the Iranian government to bypass U.S sanctions.
Now, the U.S has shifted its focus to crypto exchanges, including Binance, for potentially aiding Iran in bypassing these sanctions.
Although Binance has denied facilitating illicit Iranian capital flows, the pressure could be one of the reasons Dubai is scaling its crackdown on unlicensed exchanges.
Separately, the UAE is also reportedly exploring freezing Iranian assets to block Tehran’s access to foreign currency and global trade. In January, the blockchain security research firm TRM Labs found that the Iranian regime accounted for half of the crypto activity in the country.
Put differently, crypto has become a key lifeline for the Iranian regime and could attract more scrutiny from regional and Western regulators amid the ongoing tensions.
Final Summary
- Dubai’s watchdog issued a “cease and desist” warning to MEXC and KuCoin for operating without a license in the region.
- Intense crackdown follows rising regional and Western pressure to block capital inflows to the Iranian regime.