Fuze, a crypto infrastructure provider backed by prominent regional and international investors, has been penalised by Dubai’s virtual assets regulator for shortcomings in its anti-money laundering framework and violations of licensing requirements.
Operating in the UAE under the name Morpheus Software Technology, Fuze provides digital assets-as-a-service solutions, enabling banks, payment firms, fintechs and traditional enterprises across the Middle East, North Africa and Turkey to deliver regulated digital assets, such as stablecoins, to their customers.
The company also manages an over-the-counter trading desk, offering institutions and high-net-worth investors private trading outside of public exchanges, with a minimum transaction threshold of USD 25,000.
According to its website, Fuze has facilitated more than USD 1 billion in transactions for over 500 institutional clients.
An investigation launched in April by the Virtual Assets Regulatory Authority (Vara) “identified failures in Fuze’s anti-money laundering programme, related governance, compliance and internal systems and controls,” the regulator stated in an enforcement notice issued this week.
The regulator further found that Fuze had “knowingly carried out unlicensed virtual asset activities, contravening the terms of its licence, and withheld material information.”
Vara did not reveal the size of the penalty imposed.
In a statement to AGBI, a Fuze spokesperson said the company is addressing the regulator’s findings with a “comprehensive remediation plan that is already underway.”
“The matter concerns historical transactions and related compliance issues, and as soon as Vara raised the matter, we immediately initiated an internal review, suspended the activity, and began implementing corrective measures,” the spokesperson added.
The company emphasised that the findings do not affect its ongoing business operations, including its core digital assets-as-a-service platform, which continues to serve financial institutions across the region without interruption.
