“VARA Enforcement Actions Against CoinMENA, MEXC and KuCoin: Key Compliance Lessons for Virtual Asset Service Providers in Dubai”
"VARA Strengthens Enforcement of Dubai’s Virtual Asset Regulatory Framework: Recent Actions Against CoinMENA, MEXC, and KuCoin "
By: Lex & Strategy Legal Consultancy
The Dubai Virtual Assets Regulatory Authority (VARA) continues to demonstrate its commitment to maintaining the integrity, transparency, and compliance standards of Dubai’s Virtual Asset ecosystem through a series of recent enforcement actions announced in June 2026.
The actions, which involve CoinMENA FZE, MX Global Ltd (operating as MEXC), and entities associated with KuCoin, underscore VARA’s increasingly proactive supervisory and enforcement approach aimed at ensuring compliance with licensing, Anti-Money Laundering (AML), Know-Your-Customer (KYC), and consumer protection requirements.
Dubai’s Regulatory Framework for Virtual Assets
Since the enactment of Dubai Law No. 4 of 2022 Regulating Virtual Assets in the Emirate of Dubai, VARA has been entrusted with the responsibility of licensing, supervising, and enforcing compliance among Virtual Asset Service Providers (VASPs) operating in or from Dubai.
The regulatory framework is further supported by:
• Federal Decree-Law No. 10 of 2025 on Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation Financing;
• Cabinet Resolution No. 111 of 2022 Regulating Virtual Assets and Related Service Providers;
• VARA Regulations and Rulebooks. Recent enforcement measures illustrate VARA’s willingness to take action against both licensed entities that fail to maintain adequate compliance controls and unlicensed entities operating outside the regulatory perimeter.
Enforcement Action Against CoinMENA FZE
On 22 June 2026, VARA announced enforcement measures against CoinMENA FZE, a licensed Virtual Asset Service Provider Authorized to provide Broker-Dealer Services in Dubai.
Following supervisory inspections covering CoinMENA’s operations through the end of the 2025 financial year, VARA identified administrative deficiencies within the firm’s internal systems and controls that resulted in compliance shortcomings relating to its Anti-Money Laundering (AML) Programme.
Although the deficiencies did not relate to unlicensed activity, VARA determined that enforcement action and financial penalties were appropriate due to the identified compliance failures.
Notably, VARA acknowledged that CoinMENA cooperated fully throughout the supervisory process, accepted the regulator’s findings, and initiated a remediation programme aimed at strengthening its compliance framework. vara.ae
Enforcement Action Against MEXC
In a separate enforcement action announced on the same date, VARA imposed penalties against MX Global Ltd, operating commercially as MEXC.
According to VARA’s findings, MEXC had been providing virtual asset broker-dealer and/or exchange services to customers in Dubai from 2022 until April 2026 without obtaining the required VARA Licence.
VARA further found that the entity had onboarded users without satisfying applicable KYC obligations required under UAE law.
The regulator concluded that these activities constituted breaches of:
Dubai Law No. 4 of 2022;
Federal AML legislation;
Cabinet Resolution No. 111 of 2022; and
Applicable VARA Regulations and Rulebooks.
As a result, VARA imposed financial penalties and ordered the entity to immediately cease and desist from conducting any unlicensed virtual asset activities in or from Dubai.
VARA also noted that MEXC cooperated with the investigation and complied with the regulator’s cease-anddesist orders. The company reportedly expressed an intention to enter VARA’s licensing process in the future. vara.ae
VARA’s Action Against KuCoin-Related Entities
VARA has also intensified its scrutiny of entities associated with the KuCoin Cryptocurrency exchange.
In March 2026, VARA issued an Investor and Marketplace Alert concerning several entities linked to the KuCoin platform, including Peken Global Limited, Phoenixfin Pte Ltd, MEK Global Limited, and KuCoin Exchange EU GmbH.
The regulator stated that these entities appeared to be providing virtual asset services to Dubai residents without obtaining the required regulatory approvals and may have misrepresented their licensing status.
VARA instructed the entities to immediately cease and desist from any unlicensed virtual asset activities targeting Dubai residents and warned consumers that KuCoin did not hold any licence authorizing it to provide virtual asset services in or from Dubai. vara.ae
The regulatory concerns surrounding KuCoin also align with broader international scrutiny. In other jurisdictions, authorities have taken enforcement action against entities associated with the exchange for regulatory and compliance-related deficiencies, reflecting a global trend toward heightened oversight of virtual asset service providers. cftc.gov
Key Regulatory Themes Emerging from VARA’s Enforcement Actions
These recent enforcement measures highlight several important regulatory themes:
Licensing Is Non-Negotiable
VARA continues to emphasize that any entity providing virtual asset services in or from Dubai must obtain the appropriate regulatory approvals before commencing operations.
AML and KYC Compliance Remain a Priority
Even licensed entities remain subject to ongoing supervision and enforcement where deficiencies are identified in AML, KYC, governance, or internal control frameworks.
Cooperation Mitigates Regulatory Consequences
VARA has repeatedly acknowledged cooperation and remediation efforts by regulated entities, indicating that proactive engagement with the regulator may influence the nature and scope of enforcement outcomes.
Consumer Protection Is Central
The publication of alerts, warnings, and enforcement notices demonstrates VARA’s commitment to ensuring that investors and consumers have access to accurate information regarding the licensing status and compliance standing of virtual asset providers.
Conclusion:
The recent actions against CoinMENA, MEXC, and entities associated with KuCoin reflect VARA’s increasingly mature and assertive regulatory posture. Dubai continues to position itself as a leading global hub for digital assets; however, that ambition is accompanied by rigorous expectations regarding licensing, AML compliance, governance standards, and consumer protection.
Virtual Asset Service Providers seeking to operate within Dubai must ensure that their compliance frameworks are not merely adequate at the point of licensing but remain effective throughout their operations. The latest enforcement actions serve as a clear reminder that both licensed and unlicensed entities remain subject to ongoing regulatory scrutiny and enforcement.
Sources:
VARA Notice of Fines – CoinMENA FZE (22 June 2026)
VARA Notice of Fines – MX Global Ltd (MEXC) (22 June 2026)
VARA Investor and Marketplace Alert – KuCoin Related Entities (5 March 2026)