Dubai’s Crypto Shops Are On The Rise

Dubai’s Crypto Shops are on the rise as evidenced by a doorman in a Dubai skyscraper’s lobby who answers questions from customers about a crypto store that is becoming more and more well-known and directs them to office 501, which is on the fifth floor.

According to bankers, attorneys, and cryptocurrency executives with knowledge of the situation, this crypto shop is called Coinsfera, an over-the-counter exchange.

Coinsfera is becoming popular with Russians, Iranians, and other people who find it difficult to transfer money through banks because of Western sanctions or local restrictions.

Customers can buy cryptocurrency assets in their home countries using local currency and then sell them for cash in Dubai thanks to the OTC structure. According to customers and employees at Coinsfera, the procedure takes a few minutes and entails checking an identity document and responding to a few questions.

Clients include regular people exploring cryptocurrency or navigating capital restrictions and controls that don’t apply to them but can impede banking. Sanctioned Russians have, however, flown to Dubai for significant OTC transactions, according to multiple sources.

The operation of Coinsfera and other OTC stores is not prohibited because Russia is not subject to any international sanctions and the UAE has not imposed its own penalties on it or on Russian citizens who are the subject of other sanctions.

It’s unclear how much money is being moved using cryptocurrency as a conduit or what percentage of it might catch the attention of regulators because trades are cash-based and not publicly reported.

The United Arab Emirates was placed on the Financial Action Task Force’s “gray list” in March, and now the OTC trade is increasing international scrutiny over possible illicit money flows through this country.

According to a spokesperson, Coinsfera has offices in Istanbul and Dubai and thoroughly screens prospective clients, verifying identification and adhering to protocols intended to stop illicit flows.

The company also uses digital currency to help customers buy and sell luxury watches and real estate, and the spokesperson said there had never been a problem with either customers or the law.

A framework governing virtual assets is being finalized, while Dubai’s crypto shops are popping up everywhere i.e. are on the rise, according to a spokesperson for the UAE executive office responsible for combating money laundering and terrorist financing (AML/CFT).