Dubai’s digital asset regulator has instructed KuCoin and all entities associated with the exchange to cease their crypto operations in the Emirates, stating that the platform operated an illegal, unlicensed virtual asset service.

 

In a recent news alert, the Virtual Assets Regulatory Authority (VARA), Dubai’s digital assets regulator, warned residents about the unlicensed crypto operations of KuCoin and its affiliated entities: Phoenixfin Pte Ltd, MEK Global Limited, Peken Global Limited, and KuCoin EU GmbH.

 

Image credit: VARA

 

According to VARA, KuCoin and its entities lacked the necessary regulatory approvals to operate in the region and that they misled the public about their licensing status.

 

"In accordance with Dubai Law No. (4) of 2022 and Cabinet Resolution No. 111/2022, all virtual asset service providers must be licensed to operate legally in this jurisdiction. KuCoin does not meet these legal requirements and is not authorised to provide any virtual asset services in or from Dubai," the regulator said.

 

Since KuCoin lacked the regulatory approval required to operate in the United Arab Emirates, the regulator clarified that any promotion, advertising, or solicitation related to the exchange and its virtual asset products was illegal.

 

Thus, KuCoin has been instructed to cease and desist from all unlicensed virtual asset activities in the region. The regulator also urged Dubai residents and investors to consult its public register of licensed and approved VASPs before engaging with any platform.

 

 

Kucoin’s Rough Edge With Regulatory Compliance

KuCoin has had its own battles with regulatory compliance in recent years. In February 2024, Austria’s Financial Market Authority temporarily restricted the exchange from onboarding new customers to its platform.

 

According to the regulator, KuCoin lacked key compliance personnel responsible for anti-money laundering (AML), counter-terrorist financing (CTF), and sanctions monitoring. The exchange was therefore found to be non-compliant with regulatory obligations under the EU crypto framework. As a result, KuCoin had to temporarily halt its operations until full compliance was achieved.

 

In 2025, Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) imposed a $19.6 million fine on KuCoin, accusing the exchange of serious anti-money laundering (AML) violations and failing to register as a money services business. The fine came three years after the exchange was permanently banned in Ontario.

 

KuCoin also had to exit the U.S. market in 2025 after being accused of operating an unlicensed money-transmitting business and other anti-money-laundering violations. It paid a $300 million fine and agreed to remain out of the U.S. market for at least two years.

 

 

A Coinbase shareholder has filed a derivative lawsuit against several top executives and board members of the crypto exchange, alleging compliance and disclosure failures by the company’s leadership. 

 

On Tuesday, Kevin Meehan, one of Coinbase’s shareholders, filed a complaint in a U.S. district court in New Jersey. The court filing cited several of Coinbase’s top directors, including CEO Brian Armstrong, co-founder Fred Ehrsam, Chief Legal Officer Paul Grewal, and Chief Financial Officer Alesia Haas, among other executives.

 

Image credit: PACER

 

 

According to the filing, the plaintiff accused the defendants of making false and misleading statements between April 2021, when the exchange became a publicly traded company, and June 2023. The complainant alleged that a compliance failure by the exchange's leadership exposed the company to several stringent regulatory actions.

 

On behalf of Coinbase, the complainant, Kevin, is seeking damages, requesting that the court implement corporate governance reforms, and requesting recovery of any profits the exchange's leadership may have obtained during the period when the exchange faced these compliance cases.

 

However, since this is a shareholder derivative lawsuit, any financial recovery from Coinbase's directors will go to Coinbase rather than directly to the shareholders.

 

 

Coinbase Battle With Compliance

Over the past few years, Coinbase has faced several legal and compliance challenges, paying millions of dollars in damages and penalties. 

 

In January 2023, the New York State Department of Financial Services sued the exchange for major failures in its Anti-Money Laundering (AML) program. The regulator accused Coinbase of having weak Know-Your-Customer (KYC) checks and failing to properly review suspicious transactions.

 

As part of the settlement, Coinbase agreed to pay $100 million: $50 million in penalties and $50 million to improve its compliance checks and systems.

 

In June 2023, Coinbase was hit with a $5 million penalty by the New Jersey Bureau of Securities. The regulator accused the exchange of allowing the trading of unregistered securities on its platform, prompting several other states to impose restrictions on its staking services at the time.

 

Coinbase has also faced legal challenges from the U.S. Securities and Exchange Commission (SEC). In 2023, the SEC filed a lawsuit against the company, alleging it operated an unregistered exchange. Following the announcement, Coinbase’s stock dropped sharply, falling from over $60 to under $50 within minutes of the news breaking.