Talal Tabbaa, CEO of CoinMENA, believes that the collapse of FTX will remain the same as the UAE’s vision to become a global crypto hub. As the FTX contagion affects various sectors of the global crypto ecosystem, Dubai-based industry leaders commented on how the debacle will affect the fledgling United Arab Emirates (UAE) crypto hub. From tighter regulations to better pioneering projects, multiple professionals offered perspectives on how Dubai and the UAE crypto landscape will be affected by the FTX exchange crash. Kokila Alagh, Founder and CEO of KARM Legal Consultants, believes the collapse of FTX will result in increased scrutiny and due diligence before projects are approved under the Dubai licensing process. He explained:
“Due to FTX’s misuse of funds or limited disclosures, these regulatory bodies must now look more closely at the technology. Merely sending financial documents will not be enough; continuous and real-time monitoring of these platforms could be one of them. The paths to be taken. Alagh also told that FTX’s collapse could see better projects take the lead in this space. A solid foundation,” he added.
According to Heaver, authorities should also consider closely scrutinizing influencers who promote “carpet tearing, pump-and-dump schemes, and fake token sales.” Heaver cites Shark Tank star Kevin O’Leary’s FTX exchange actions and how people may have invested their funds in FTX after being persuaded. Heaver believes the organizers also need scrutiny. Meanwhile, Talal Tabbaa, the CEO of CoinMENA, a trading platform that has secured a preliminary license for VARA, said the history of Dubai is full of examples of tough challenges and rising to the occasion. He explained:
“The collapse of one company will not change the UAE’s vision to become a global crypto hub. The FTX incident confirms the importance of a comprehensive regulatory framework. The executive also concluded that the Luna, Voyager, Celsius, and FTX incidents weren’t crypto failures but rather ineffective risk management and governance failures. They were institutional failures as opposed to technical ones, he claimed. This distinction, in Tabbaa’s opinion, is crucial.
The incident 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 problem with the internet, caused the dot-com bubble to burst. The executive pointed out that the current crypto market experiences the same thing.
The FTX exchange was one of the first to receive approval from the Dubai Virtual Assets Regulatory Authority (VARA). This regulator oversees virtual asset service providers who intend to operate locally. In July, the FTX exchange was approved under the Minimum Viable Product (MVP) program to proceed with testing and operations. However, given the circumstances surrounding the FTX exchange, VARA recently revoked the permits for FTX’s local counterpart, FTX MENA. The regulator also confirmed that the company has yet to receive approval for onboarding clients and confirmed that no clients had been disclosed.