November 24, 2022

Dubai’s VARA Suspends FTX License in MENA



Amid its collapse worldwide, the Dubai Virtual Assets Regulatory Authority (VARA) has halted the FTX license, which was supposed to allow it to offer services in the Middle East.

In an announcement made on its website, VARA said it revoked the Minimum Viable Product (MVP) license of FTX in the Middle East because of the bankruptcy filing submitted on November 11, asserting that the license was suspended before any clients were exposed.

FTX MENA was still in its preparatory phase as it had not received the required approval to start its operations and onboard clients, VARA noted, adding FTX did not open a domestic bank account in the UAE, which is needed for a virtual asset service company to provide its service in the UAE.

The Dubai regulator urged the virtual asset service providers that engaged with FTX MENA to provide disclosures, a matter that allows VARA to assess the domestic market exposure and the scale of the contagion within the UAE.

FTX CEO Sam Bankman-Fried announced in March that his company obtained the first digital asset license in Dubai. In July, FTX was approved to start its testing and preparation phases under the Minimum Viable Product (MVP) program.

Days ago, a document, which was a part of FTX’s filing process to US court about Chapter 11 bankruptcy proceedings revealed that FTX Trading LTD owes more than $3 billion to its top 50 creditors.

According to the document, FTX owes more than $226 million to its top creditor, while other sums of money are ranging between $21 million and $203 million.

Information about the identity of the creditors, or their addresses, telephone numbers, or e-mail addresses is unknown. Investigations are underway to get any of this information.

The filings following the initial announcement of FTX’s bankruptcy claimed that FTX has more than one million creditors.

FTX, once valued at $32 billion, collapsed in a matter of days after the CEO of Binance, a rival firm, said his exchange would liquidate its FTT tokens, a matter that led to the plunge of FTT value.

Earlier, Ripple CEO Brad Garlinghouse voiced his interest in purchasing companies owned by FTX after being collapsed with a focus on businesses that served business customers. In addition, Ripple eyes FTX employees who are involved in compliance, finance, or business ethics.

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