Dubai’s Virtual Assets Regulatory Authority (VARA) has taken decisive action against unlicensed crypto activity, issuing fines totaling up to AED 600,000 (USD 163,000) to 19 companies found operating without authorization or breaching marketing regulations. The move underscores the emirate’s growing focus on tightening oversight in one of the world’s most active crypto hubs.
In a statement released on Tuesday, VARA said it had issued cease-and-desist orders and financial penalties ranging from AED 100,000 to AED 600,000 depending on the scale and severity of violations. The authority did not identify the penalized firms but confirmed that all were operating without the required VARA licenses and had breached rules governing how virtual asset services may be promoted within Dubai.
“Enforcement is a critical component of maintaining trust and stability in Dubai’s virtual asset ecosystem,” VARA’s Regulatory Affairs and Enforcement Division said. “These actions reinforce our mandate to ensure that only firms meeting the highest standards of compliance and governance are permitted to operate.”
A Firm Warning to Unlicensed Operators
VARA warned that unauthorized virtual asset activities and unapproved marketing would not be tolerated under its regulatory framework. The penalized firms have been instructed to immediately halt operations and cease promotional activities related to unlicensed crypto services.
The regulator emphasized that only companies holding a valid VARA license are permitted to offer crypto-related services “in or from Dubai.” It added that its enforcement division continues to proactively identify and investigate unlicensed operators through ongoing monitoring and intelligence efforts.
VARA’s actions signal a more assertive phase in Dubai’s regulatory evolution. The penalties are among the most significant enforcement measures since the authority was established in 2022, reflecting the city’s commitment to fostering a transparent and compliant digital asset sector.
Industry Reactions: A Step Toward Market Maturity
The crackdown has been welcomed by many within the industry who view stronger enforcement as essential for long-term credibility.
Henri Arslanian, founder of Nine Blocks Capital Management, described the move as “an excellent development” for both Dubai and the wider crypto market.
“This is a positive step not only for Dubai but for the global crypto ecosystem,” Arslanian said. “It should deter some of the bad actors and reward firms that have invested the time and resources to comply with regulatory requirements.”
He also predicted that more actions are likely in the months ahead, particularly in “technical and less visible areas” of the digital asset space, such as decentralized finance (DeFi) and token promotion practices.
Dubai’s Balancing Act: Innovation Meets Regulation
Dubai has built its reputation as a leading crypto hub through progressive policies that encourage blockchain innovation while maintaining investor safeguards. VARA was created under the Dubai Virtual Assets Law in March 2022, with a mandate to regulate all virtual asset activities outside the Dubai International Financial Centre (DIFC) — which operates under a separate framework.
The emirate’s appeal has attracted global exchanges such as Binance, Crypto.com, and OKX, all of which have set up licensed operations under VARA’s supervision. This aligns with Dubai’s ambition to position itself as a global digital assets center, rivaling hubs like Singapore, Hong Kong, and Switzerland.
However, regulators have become increasingly cautious about the risk of unlicensed operators exploiting Dubai’s open environment. VARA’s marketing and promotions rulebook, which came into effect last year, imposes strict standards on advertising and communications related to crypto products — aiming to protect retail investors from misleading claims and high-risk offerings.
The 19 firms fined this week were found in breach of those standards, either through unlicensed activity, non-compliant promotions, or both.
Strengthening Investor Protection
VARA’s statement also carried a warning to consumers, highlighting the financial, legal, and reputational risks associated with dealing with unlicensed crypto platforms. The authority urged investors and institutions to verify a company’s regulatory status through its official public register before engaging in any transactions.
“Engaging with unlicensed operators can expose users to significant losses with little to no recourse,” the regulator cautioned.
The move aligns with a wider regional effort across the UAE to establish a credible, transparent, and internationally aligned regulatory framework for digital assets. The Abu Dhabi Global Market (ADGM) maintains its own virtual asset regulations, creating a competitive but complementary environment that allows digital asset firms to choose their preferred jurisdiction within the country.
A Defining Moment for Dubai’s Crypto Landscape
The latest enforcement wave marks a turning point for Dubai’s approach to crypto regulation. Once seen as one of the most permissive markets for digital assets, the emirate is now asserting its regulatory authority to ensure that innovation does not come at the expense of compliance.
By taking action against unlicensed firms, VARA is signaling that regulatory legitimacy is a prerequisite for doing business in Dubai’s fast-growing virtual asset ecosystem.
The penalties may deter non-compliant operators, but for compliant firms and investors, they serve as a reassuring sign that Dubai intends to balance crypto-friendly policies with responsible oversight.
Whether the emirate can maintain this balance amid rising global competition remains to be seen. For now, VARA’s actions make one message clear: Dubai’s crypto industry will grow — but only under the rule of law.
