The CEO of CoinMENA, Talal Tabba, thinks that the FTX fall won’t alter the UAE’s goal of becoming a central worldwide hub for cryptocurrencies.
Industry professionals in Dubai reacted to how the fiasco may affect the United Arab Emirates’ emerging crypto hub as the FTX epidemic spreads to many areas of the global crypto ecosystem (UAE).
Different specialists shared their opinions on how the collapse of the FTX exchange will impact Dubai and the UAE’s crypto scene, ranging from harsher laws to better initiatives leading the way.
The founder and CEO of KARM Legal Consultants, Kokila Alagh, predicts that greater due diligence and examination would be applied before projects are accepted in Dubai’s licencing procedure due to the FTX collapse. She stated as follows:
“These licencing authorities now need to delve further into the technology because of the misuse of cash or the sparse disclosures by FTX. More than the simple submission of financial papers will be required; instead, ongoing, real-time monitoring of these platforms may be one strategy.
Alagh also told Cointelegraph that better ventures might take the lead in the sector due to the FTX collapse. Any significant setback in an industry that is expanding allows for more robust experiences to take the information and push off weaker projects, she continued.
A partner at Keystone Law Middle East, Irina Heaver, agrees that stricter rules will soon be implemented. Heaver advised Cointelegraph that creators must be ready for increased government, user, and investor scrutiny. She stated as follows:
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They must also each establish more burdensome internal compliance and audit functions, seek legal counsel if in doubt, and take further measures above and above what is currently required to demonstrate to the project’s users that the project is acting ethically.
Heaver thinks that authorities ought to take influencers who encourage “rug pulls, pump and dump schemes, and fake token sales” very seriously. Heaver cites shark tank star Kevin O’Leary’s promotion of the FTX exchange and how investors may have invested in FTX after being persuaded as evidence that promoters need to be held accountable.
According to Talal Tabbaa, the CEO of CoinMENA, a trading platform with a provisional licence from VARA, Dubai’s history is replete with instances of significant hurdles that have been overcome. He detailed this:
“The UAE’s goal of becoming a central hub for cryptocurrency will not be altered by the failure of one company. The FTX disaster demonstrates how crucial it is to have a thorough regulatory structure.
The CEO added that the Luna, Voyager, Celsius, and FTX events were governance and practical risk management failures rather than failings of cryptocurrency. He said, “Rather than technological problems, these were institutional failings.” This divergence, in Tabbaa’s opinion, is crucial.
The episode was also likened to the dot-com bubble by the CEO of CoinMENA. In Tabbaa’s opinion, the failure of businesses relying on the internet, rather than a flaw with the internet, caused the dot-com bubble to bust. The executive pointed out that the current crypto market experiences the same problem.
Associated: Which Businesses Were Impacted By The FTX Collapse?
One of the first exchanges to receive approval from the Dubai Virtual Asset Regulatory Authority (VARA), a body in charge of monitoring virtual asset service providers looking to operate locally, was the FTX exchange. The FTX exchange received approval in July to continue testing and operations under the Minimum Viable Product (MVP) programme.
The approvals for FTX MENA, the local counterpart to the FTX exchange, have just been cancelled by VARA due to the events surrounding the FTX exchange. The regulator further stated that no clients have yet to be exposed and that the organisation still needs clearance to onboard clients.
Dubai will persevere despite the effects of the economic collapse.