Dubai suspends license of crypto exchange BitOasis

Dubai’s digital assets regulator granted BitOasis a conditional approval three months ago, allowing it to operate subject to fulfilling key conditions within 30-60 days. However, the regulatory authority found that the exchange had not met these conditions, prompting the enforcement action.

“BitOasis is under review for not meeting mandated conditions, required to be satisfied within 30-60 day timeframes prior to being permitted to undertake any VARA regulated market activity, subsequent to the issuance of its license on 12.April.2023,” the Virtual Assets Regulatory Authority said.

VARA’s statement did not explain the specific conditions that BitOasis failed to fulfill, leaving the specific details of the non-compliance undisclosed. As a consequence of the suspension, BitOasis’s “License for Institutional and Qualified Retail Investors” is currently considered “non-operational” until the exchange can satisfy the conditions set by VARA.

In May, BitOasis received the first of Dubai’s “minimum viable product operational licenses” from VARA. This license permitted it to provide broker-dealer services to qualified institutional and retail investors in Dubai. However, this operational license was just one step in a multi-step process, with the final milestone being the issuance of a full market product (FMP) license. As of now, VARA has not yet issued an FMP license to any firm in Dubai.

BitOasis will now need to address the issues raised by VARA and take corrective measures to regain its license.

“This does not impact our ability to continue to provide broker dealer services to our existing retail users, although we undertake to not onboard any new clients until we have fully complied with VARA requirements,” it said in a blog post.

Against the backdrop of a crashing market and burned investors, Dubai has recently sealed a landmark rulebook that governs how the Emirate will regulate cryptocurrency activities. The Virtual Asset Regulatory Authority (VARA), which serves as the single custodial entity mandated to license and govern crypto activities in Dubai, released guidelines for Virtual Assets Service Providers (VASPs) in February.

The new rules create a legal framework for crypto aimed at protecting investors and designing much-warranted international standards for industry governance. In addition, the VARA now has enforcement powers in Dubai’s special development and free zones with the exception of the Dubai International Financial Centre.

The regulations set out four compulsory rulebooks and activity-specific rulebooks that VASPs must comply with to offer their services. The “Full Market Product Regulations” include guidelines that lay down the rules for compliance, risk management, market conduct, and other requirements.