VARA fines MEXC operator for unlicensed virtual asset services and KYC failures in Dubai
Offshore VASPs serving Dubai without a VARA licence or UAE KYC face fines and cease-and-desist enforcement.
Change
On 22 June 2026 the Virtual Assets Regulatory Authority (VARA) fined MX Global LTD, operating as MEXC, for providing virtual asset broker-dealer and exchange services to Dubai customers without a VARA licence from 2022 to April 2026 and for onboarding users without UAE-required KYC, and issued a cease-and-desist.
Why it matters
The breach attaches to two operative failures that define the boundary for any offshore VASP touching UAE customers: serving Dubai customers without a VARA licence, and onboarding users without meeting UAE KYC obligations. VARA treats both as breaches of the UAE AML/CFT decree, Dubai's virtual asset law, Cabinet Resolution No. 111/2022 and the VARA Rulebooks, carrying financial penalties and a cease-and-desist to halt all unlicensed VA activity in or from Dubai. The fine attaches only to the named legal entity, MX Global LTD, and not to the affiliates listed in VARA's 5 March 2026 alert. Entry into the licensing process did not remove the penalty for the 2022–April 2026 unlicensed period.
Implications
- — Offshore virtual asset service providers serving UAE customers must hold a VARA licence before providing broker-dealer or exchange services in or from Dubai — unlicensed operation is treated as a breach of the UAE AML/CFT decree and Dubai's virtual asset law, drawing financial penalties and a cease-and-desist.
- — Virtual asset providers onboarding UAE customers must meet UAE KYC obligations at onboarding — VARA fined onboarding without KYC as a standalone AML/CFT breach, separate from the licensing failure.
- — Entry into VARA's licensing process does not cure a prior unlicensed period — VARA penalised conduct spanning 2022 to April 2026 despite the entity's compliance with the cease-and-desist, so authorisation must precede serving UAE customers.
Who is affected
- — Offshore virtual asset service providers serving UAE customers
- — Onboarding and KYC teams at virtual asset exchanges and broker-dealers operating in or from Dubai
- — Financial-crime teams assessing VASP counterparty exposure in the Gulf