UAE stablecoin issuer gets greenlight, FTX customers sue hedge fund: Law Decoded

As a seasoned researcher with a keen interest in the evolving digital finance landscape, I find myself intrigued by these latest developments. The Central Bank of the United Arab Emirates’ greenlight to AED Stablecoin is a significant stride towards mainstream adoption of stablecoins in the region. It’s fascinating to observe how regulators are navigating the intersection of traditional banking and cryptocurrencies, especially considering my past experiences witnessing similar shifts in other jurisdictions.


The Central Bank of the United Arab Emirates has given preliminary approval for the AED Stablecoin, doing so within the context of their Payment Token Service Regulation system.

The initial approval of AED Stablecoin’s license positions it as a leading contender in the competition to be the first entity authorized to issue a regulated UAE Dirham-linked stablecoin within the UAE.

This evolution alleviates worries related to potential limitations on cryptocurrency transactions, stemming from the Central Bank of the UAE’s latest unveiling of its licensing system. Under this framework, cryptocurrencies are not allowed for payments unless they involve licensed digital tokens pegged to the dirham.

Should it receive full approval, the AE Coin from AED Stablecoin might function as a native trading option for cryptocurrencies on both centralized exchanges and decentralized platforms. Additionally, businesses could potentially accept this coin as a form of payment for their products and services.

Dubai’s crypto regulator cracks down on unlicensed firms

The regulatory body for cryptocurrencies in Dubai is taking action against unauthorized crypto businesses that don’t comply with their marketing guidelines. In simpler terms, they are enforcing regulations on these companies to ensure they play by the book when it comes to advertising and operating within the crypto market.

On October 9th, the Dubai Virtual Assets Regulatory Authority (VARA) handed out penalties and ordered seven companies to halt their operations due to violations of marketing rules and lack of necessary permits.

VARA is working jointly with other local administrations for more in-depth probes regarding the matter. At this point, they haven’t disclosed which companies are subject to the penalties.

FTX user sues hedge fund over bankruptcy profits

A client of FTX is filing a lawsuit against Olympus Peak Hedge Fund, claiming that they are required to pay him extra compensation following his sale of his claims on the failed trading platform.

According to reports, Nikolas Gierczyk, a user of FTX based in California, has filed a lawsuit against Olympus Peak, a hedge fund. The lawsuit claims that Olympus Peak could potentially earn over $1 million from their deal with Gierczyk. However, Gierczyk asserts that the hedge fund breached a clause in their agreement, which entitled him to additional compensation should the deal’s value exceed a certain amount.

Based on Bloomberg’s report, Gierczyk chose to sell his $1.59 million stake in the FTX case to a hedge fund at a 42% reduction, pocketing a $930,000 payment. On the other hand, due to FTX’s restructuring plan being approved, customers are projected to recover between 129% and 146% of their initial claims.

FTX investors end lawsuit targeting Sullivan & Cromwell

Investors from FTX have chosen to withdraw their proposed collective legal action against the U.S. law firm, Sullivan & Cromwell (S&C), on their own accord.

On February 16th, a group of FTX’s debtors filed a lawsuit against a law firm, claiming that the firm was involved in FTX’s multi-billion dollar fraud scheme and profited from it. The suit seeks financial compensation for damages related to civil conspiracy, assisting with breaches of fiduciary duties, and facilitating fraud.

In various transactions, S&C functioned as external legal advisor for FTX, while also managing the bankruptcy process for FTX.

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2024-10-14 22:05