Dubai’s Vara Fines Morpheus Software Technology for AML Violations
Virtual Assets Regulator cites compliance failures, unlicensed operations, and governance lapses as it tightens oversight in Dubai’s digital asset sector.
Regulator cites governance failures, unlicensed activity, and non-disclosure as key breaches; remediation plan and supervision imposed
Dubai’s Virtual Assets Regulatory Authority (Vara) has fined Morpheus Software Technology FZE (Morpheus Fuze) for multiple breaches of its regulatory obligations, including violations of anti-money laundering (AML) requirements, governance lapses, and unlicensed virtual asset (VA) activities.
Morpheus was issued a Virtual Asset Service Provider Licence on October 19, 2023, but a regulatory investigation initiated on April 15, 2025 uncovered serious shortcomings. Vara identified deficiencies in the company’s AML programme, weak compliance structures, and ineffective internal controls.
In addition, Morpheus was found to have intentionally conducted unlicensed VA activity, in breach of its licence terms, and failed to disclose critical facts to the regulator.
Enforcement Action and Oversight
Following the investigation, Vara imposed a financial penalty on Morpheus—though the authority has not disclosed the amount. The company has acknowledged the findings and proposed a remediation plan, which includes measures to strengthen compliance and governance.
To ensure corrective action, a skilled person will be appointed to oversee the remediation process. Morpheus will also remain under ongoing supervision by Vara, with strict monitoring of its remedial obligations to safeguard the marketplace and protect consumers.
Vara’s Mandate
As Dubai’s official regulatory authority for virtual asset services—excluding the Dubai International Financial Centre (DIFC)—Vara is tasked with regulating, supervising, and enforcing compliance across the sector. The enforcement against Morpheus underscores Vara’s commitment to upholding governance and transparency in the virtual assets market, while ensuring consumer protection and financial integrity.
