Cake DeFi Co-Founder Launches Ordzaar Ordinals Marketplace

UAE strengthens regulatory oversight of virtual asset service providersThe Central Bank of the United Arab Emirates (CBUAE) and other relevant authorities in the Middle Eastern country have issued new joint guidance for virtual asset service providers (VASPs) operating within the UAE.Photo by Thomas Drouault on UnsplashPushing back against unlicensed VASPsThese guidelines aim to prevent VASPs from operating without proper licenses in the jurisdiction, demonstrative of the country’s efforts in fighting financial crimes and maintaining the integrity of its financial system.The document outlines the penalties for VASPs operating in the UAE without a valid license. They will face civil and criminal sanctions, including financial penalties against the entity, its owners and senior managers. Moreover, the guidance cautions that licensed financial institutions (LFIs), designated non-financial businesses and professions (DNFBPs) and licensed VASPs that engage with unlicensed VASPs will be subject to law enforcement actions.The National Anti-Money Laundering and Combating Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC) is the specific entity responsible for having issued the guidance in conjunction with the central bank.VASP ‘red flags’As part of those guidelines, a list of “red flags” for VASPs has been included. Through reliance on these indicators, it’s hoped that bad acting VASPs can be identified by consumers and other industry stakeholders. The document refers to red flags such as the lack of regulatory licensing, no physical presence in the UAE, pressure being applied by a platform to invest quickly and a lack of regulatory disclosure as items to look out for.Otherwise, the guidance encourages stakeholders to be suspicious of unsolicited contact being employed as a means of operation by a platform, the lack of a record of compliance, poor website and communications and the offer of unrealistic promises.Lastly, the document suggests that people should be observant of any illicit use of virtual currency, the use of fake wallets, engagement in terrorist financing and a lack of consumer protection as red flag items.The new guidance instructs all LFIs, DNFBPs and licensed VASPs to report transactions involving suspicious parties. The guidance also emphasizes that information related to unlicensed virtual asset activities can be reported through whistleblowing mechanisms.Exiting FATF ‘grey list’The release of these guidelines is part of an effort by the UAE to be removed from the Financial Action Task Force’s (FATF) “grey list.” The grey list indicates deficiencies in a country’s anti-money laundering (AML) and counter-terrorist financing (CTF) regimes.Improving control mechanisms relative to crypto has been a theme for several countries who are similarly looking to exit the FATF grey list. Last week, it emerged that Turkey is crafting new regulations governing crypto in an effort towards “grey list” removal. Earlier this year, Pakistan announced a renewed ban on cryptocurrency, as part of its efforts to remain off the grey list it had been listed on over an extended period.The UAE was placed on the FATF’s grey list in March 2022 due to AML and CTF deficiencies. However, the country made a commitment to work with the global watchdog to improve its regulatory frameworks in these areas.

Crypto.com’s Dubai-based subsidiary secures crypto licenseCRO DAX Middle East, the Dubai-based subsidiary of Singapore-headquartered cryptocurrency exchange platform Crypto.com, has achieved a significant milestone by obtaining a license from the emirate’s Virtual Assets Regulatory Authority (VARA) to provide specified virtual asset services.Photo by Timo Volz on UnsplashExpanding product offering in DubaiThe approval, announced by the firm via a press release published to its website on Tuesday, marks a pivotal moment for the Singapore-based Crypto.com, allowing it to offer regulated virtual asset services in Dubai, including exchange services, broker-dealer services, management and investment services as well as lending and borrowing services.The virtual assets service provider (VASP) license is contingent upon CRO DAX Middle East meeting specific conditions and localization requirements outlined by VARA. Once these conditions are satisfied and the operational approval notice is received from the regulator, the company will be poised to commence operations. These services will be made accessible to both retail and institutional users through Crypto.com’s app and exchange platform.Kris Marszalek, CEO of Crypto.com, expressed his enthusiasm for Dubai’s regulatory approach, stating: “Dubai continues to show it is a leading market when designing effective regulation for the crypto space while still supporting adoption and innovation.”Dubai’s virtual asset sector developmentThe regulatory framework for virtual assets in Dubai was established under the Dubai Virtual Asset Regulation Law in March 2022, leading to the creation of VARA. Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, founded VARA with the aim of developing an advanced legal framework to safeguard investors. Furthermore, the objective was to set international standards for the governance of the virtual asset industry, while fostering responsible business growth.VARA issued regulations in February to provide clarity and certainty on the expected level of operator responsibility and to mitigate market risks. This move aligns with the broader context of global cryptocurrency regulations, aiming to create a safe environment for investors in the wake of recent collapses of major platforms.Crypto.com is working to become one of the first virtual asset exchanges to implement its VASP license in accordance with VARA’s specialized regulations issued earlier this year. The company had previously received its minimum viable product provisional license in June 2022 and the MVP preparatory license in March of the current year. The operational license, which follows the preparatory and provisional stages, grants virtual asset service providers permission to conduct activities in seven specified categories.Adapting to the marketThe company has also been working on licensing in other markets. In Singapore, where it is headquartered, the company received a Major Payment Institution (MPI) trading license from the Monetary Authority of Singapore (MAS) in June. The company has also re-calibrated its offering based on market shifts. Earlier this year, it halted its institutional exchange service in the United States due to a downturn in institutional demand stateside.In March 2022, Crypto.com declared Dubai as its regional hub for the Middle East and North Africa (MENA), solidifying its commitment to expanding its presence and contributing to the growth of the cryptocurrency ecosystem in the region.

In a recent announcement, Russia-linked cryptocurrency exchange Bitzlato revealed a temporary suspension of certain withdrawal requests, with the suspension taking effect as of Dec. 27. Asset seizureThe decision comes in the wake of French authorities seizing Bitzlato's assets in January last year, a move that also involved international law enforcement, including U.S. authorities. In a message shared on Telegram, Bitzlato explained the suspension: "… We are faced with the need to suspend special balance withdrawals and technical support. This is a temporary measure to prepare for and go through the upcoming court hearings regarding the seizure of user assets in France."Photo by Chris Karidis on UnsplashSpecial balance withdrawalsThe specifics of transactions categorized as "special balance withdrawals" were not disclosed by Bitzlato, and it remains unclear whether the withdrawal freeze is applicable exclusively to users in France. Despite the asset seizure and subsequent closure of Bitzlato's website, the company asserted in its latest statement that it managed to "close 70% of the balance" held at the time of the service shutdown. However, no details were provided on how the company intends to fulfill its obligations with its assets frozen. Bitzlato has been under scrutiny from the U.S. Treasury, which identified the exchange as a money laundering concern linked to illicit Russian financing. Transactions with Bitzlato have been prohibited by the U.S. government. Hydra Market counterpartyThe Department of Justice (DOJ) separately accused Bitzlato of facilitating money laundering and other crimes, alleging involvement in laundering $700 million connected to the now-defunct Russian darknet market, Hydra Market. The DOJ's United States Attorney Breon Peace characterized Bitzlato as an "open turnstile by criminals," while the exchange was deemed a "crucial financial resource" for Hydra Market, enabling the laundering of funds, including those from ransomware attacks. Registered in Hong Kong, Bitzlato served as the largest counterparty in cryptocurrency transactions for Hydra Market, a darknet marketplace for narcotics and illicit drugs. In April 2022, U.S. and German authorities jointly shut down the illicit marketplace. The legal troubles extend to company executives, with Bitzlato founder Anatoly Legkodymov pleading guilty to charges related to the illicit transfer of funds in the U.S. on Dec. 6. Legkodymov agreed to forfeit $23 million to prosecutors and faces a potential prison sentence of up to five years. He is currently imprisoned at the Metropolitan Detention Center (MDC) in Brooklyn, New York. European authorities also arrested senior management linked to Bitzlato in January 2023. The exchange's precarious situation highlights the challenges faced by cryptocurrency platforms amidst regulatory scrutiny and legal actions. The MDC facility also currently holds John Karony, the CEO of crypto company Safemoon and convicted fraudster and former FTX founder, Sam Bankman-Fried. The Department of Justice found itself the subject of major criticism on Friday, when it emerged that it had informed the court that it would not be pursuing a second trial against Bankman-Fried. A second trial would have centered upon campaign financing offenses. It would have likely implicated Bankman-Fried’s parents. According to federal prosecutors, the disgraced FTX CEO donated customer funds to the tune of $100 million to U.S. politicians. It’s unclear which of these politicians, if any, has returned the money, with critics alleging corruption.