Dubai Regulator Orders MEXC, KuCoin to Halt Unlicensed Crypto Operations
The Dubai Virtual Assets Regulatory Authority (VARA) has mandated that crypto exchanges MEXC and KuCoin, along with their affiliates, halt all unlicensed operations in the region. This decision underscores Dubai’s commitment to regulating the crypto sector and ensuring compliance among market participants.
VARA’s Crackdown on Unlicensed Crypto Operations
In a public statement, VARA highlighted that MEXC affiliates lack the necessary licenses to operate in Dubai. Furthermore, the regulator warned investors about the financial risks and potential legal implications of engaging with these exchanges.
Warnings Issued to MEXC and KuCoin
- VARA’s warning to MEXC came notably after it issued a similar advisory against KuCoin.
- On Thursday, VARA cautioned users about engaging with KuCoin and its virtual asset services.
The authority urged Dubai consumers and investors to refrain from interactions with either exchange until licenses are obtained. This action aligns with Dubai’s broader strategy of maintaining a crypto-friendly environment for compliant entities only.
Context of the Regulatory Actions
Dubai has previously taken significant steps to regulate the crypto industry. In October 2025, VARA imposed fines on 19 firms for unlicensed crypto operations, with penalties ranging from $27,000 to $163,000. Most of these firms typically seek regulatory approval afterward to resume activities.
Recently, Dubai’s crackdown comes amid heightened crypto activity connected to geopolitical tensions. The UAE stands as the second-largest crypto market in the Middle East and North Africa (MENA), with reported crypto flows reaching $53 billion as of June 2025.
Surge in Regional Crypto Activity
The situation has escalated significantly with a 700% increase in crypto operations in Iran, where citizens are using digital currencies to navigate U.S. sanctions. The Iranian government has increasingly relied on cryptocurrencies for alternative financial dealings.
In light of these developments, U.S. regulators have turned their focus toward exchanges like Binance, investigating potential facilitation of Iranian capital flows. Despite Binance’s denials, the scrutiny on crypto operations in Dubai is intensifying, partially in response to external pressures regarding Iran.
Conclusion
The VARA’s directive for MEXC and KuCoin to cease operations highlights a pivotal moment in Dubai’s regulatory landscape. As global pressures mount, the emirate is poised to continue its efforts in enforcing compliance and mitigating risks associated with unlicensed crypto activities.
