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Islamic Finance

Islamic Coin hits regulatory roadblock in Dubai

Dubai's Virtual Assets Regulatory Authority (VARA) has issued an alert to investors, warning that the company distributing and marketing Islamic Coin (ISLM) lacks the necessary regulatory authority.

VARA has directed Bored Gen DMCC (BG), the company behind ISLM, to halt all marketing activities until the appropriate approvals from VARA are secured, and BG introduces necessary disclaimers in connection with its marketing efforts.

Launched in September, Islamic Coin (ISLM) aims to provide a Shariah-compliant alternative to traditional cryptocurrencies. It garnered substantial funding, reaching a total of $400 million, making it one of the largest fundraising efforts in the history of the crypto space.

In a public statement issued on October 4, VARA said that BG is not a licensed or registered Virtual Assets (VA) issuer within its jurisdiction.

This lack of proper authorization puts BG in violation of the region's regulations regarding VA activities.

Furthermore, VARA pointed out that BG's public sale of ISLM, conducted through a "Regulation D Offering arranged by OpenDeal Portal LLC," may potentially breach Regulation III.A.1.

These regulatory developments have come just days after Islamic Coin was celebrated as "Blockchain Innovation of the Year.”

VARA has encouraged anyone targeted by BG or who has purchased the ISLM token to contact the regulator via email.

“VARA continues to monitor the situation and may take further enforcement actions against BG and any responsible individuals as may be warranted,” the statement said.

Founded in the year 2022, VARA overseas all virtual asset service providers operating within Dubai.