Thursday, November 30, 2023

Dubai’s Virtual Assets Regulatory Authority (VARA) has recently announced that Bored Gen DMCC, the company responsible for promoting and selling the Islamic Coin (ISLM), is not authorized to carry out such activities. VARA has instructed the company to discontinue its marketing operations until it secures the requisite approvals. This regulatory intervention transpired mere days after the cryptocurrency initiative had been distinguished as the year’s leading blockchain innovation.

Illicit Issuance and Circulation of Islamic Coin

VARA, Dubai’s governing body for digital assets, has cautioned investors and stakeholders about what it categorizes as the “unlawful issuance, promotion, and retail circulation” of Islamic Coin (ISLM) by Bored Gen DMCC (BG). In an advisory published on October 4, VARA clarified that BG is neither a licensed nor registered virtual asset issuer, and as such, its operations contravene the existing regulatory framework in the region.

The authority also indicated that the public dissemination of the token, orchestrated through a “Regulation D Offering” facilitated by Opendeal Portal LLC, could potentially contravene Regulation III.A.1. VARA emphasized that the requisite permissions have not been granted to BG for these activities.

Unsanctioned Marketing of Islamic Coin

VARA’s enforcement action follows less than a month after the cryptocurrency project’s initiators had begun the sale and distribution of ISLM. Moreover, the regulator’s move was executed just days after the project had garnered an award for being the most innovative blockchain development of the year.

Notwithstanding the achievements and milestones attained by the crypto initiative, VARA reiterated in its advisory that the token may have been promoted without the necessary regulatory consent. VARA further elaborated:

“An investigation is underway to ascertain whether Administrative Order No. 01/2022, which pertains to the regulation of marketing, advertising, and promotional activities associated with virtual assets, has been violated. BG is instructed to halt all marketing endeavors until it secures the necessary permissions from VARA and integrates suitable disclaimers into its marketing materials.”

In conclusion, VARA advised investors and those who may have been approached by BG to report their experiences to the regulatory body via email.

Share your views on this development in the comments section below.

Frequently Asked Questions (FAQs) about Regulatory Intervention

What is the Virtual Assets Regulatory Authority (VARA) in Dubai?

VARA, or the Virtual Assets Regulatory Authority, is the regulatory body in Dubai responsible for overseeing digital assets and their operations within the region.

Why did VARA intervene in the case of Islamic Coin (ISLM)?

VARA intervened because it identified unauthorized issuance, marketing, and retail distribution of Islamic Coin (ISLM) by Bored Gen DMCC (BG). BG was not a licensed or registered virtual assets issuer, which violated the region’s regulatory framework.

What potential violation did VARA highlight regarding the public sale of ISLM?

VARA raised concerns that the public sale of ISLM, conducted through a “Regulation D Offering” by Opendeal Portal LLC, may have potentially violated Regulation III.A.1. BG had not obtained the necessary approvals from VARA for these activities.

Why did VARA’s intervention come shortly after the crypto project’s blockchain innovation award?

Despite the crypto project’s accolades, VARA suspected that the token may have been marketed without proper regulatory approval. VARA initiated an investigation into this matter.

What action did VARA instruct Bored Gen DMCC (BG) to take?

VARA directed BG to cease all marketing activities until it obtains the requisite approvals from VARA. Additionally, BG was required to include appropriate disclaimers in its marketing materials.

How can individuals affected by BG’s activities report their experiences to VARA?

VARA encouraged individuals who had dealings with BG to notify the regulatory authority via email.

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