VARA bans the sale of ISLM, is it because this currency might be involved in money laundering and terrorist attacks?

Islamic Coin (ISLM) is a digital currency designed to comply with Islamic financial principles, particularly those related to investments and financial transactions. In Islamic finance, certain practices such as charging interest (riba) and investments in businesses involved in prohibited activities (like alcohol, gambling, etc.) are not allowed. Therefore, Islamic Coin aims to offer a cryptocurrency option that adheres to these principles.

Specifically include:

1. Sharia Compliance: Ensuring that all transactions and investments made with the coin adhere to Islamic law. This could involve oversight by a board of Sharia scholars.
2. Ethical Investments: Restricting investments in industries considered haram (forbidden) in Islam, such as alcohol, pork, gambling, and others.
3. Interest-Free Transactions: Avoiding the practice of charging or paying interest, which is prohibited in Islam.
4. Profit and Loss Sharing: Aligning with Islamic principles of risk sharing, where profits and losses are shared between parties involved in a financial transaction.
5. Transparency and Fairness: Ensuring that all transactions are transparent and fair, with no exploitation or deception.

DUBAI VARA prohibits the sale of ISLM

Image Source:https://www.vara.ae/en/regulations/regulatory-notices/bored-gen-dmcc/

The Virtual Asset Regulatory Authority (VARA) is a type of regulatory body, typically responsible for overseeing cryptocurrencies and virtual assets. The emergence of such authorities is a response to the rapid development of digital currencies and blockchain technology, as well as their growing impact on the global financial system. The main objectives of VARA may include:

1. Ensuring Transparency and Compliance: VARA might require cryptocurrency exchanges and other virtual asset service providers to adhere to specific transparency and reporting standards to prevent money laundering and the financing of terrorist activities.
2. Protecting Consumer Rights: By ensuring the fairness of transactions and the reliability of virtual asset companies, VARA may be dedicated to protecting investors and consumers from fraud and other illegal activities.
3. Promoting Technological Innovation: At the same time, VARA may seek to provide a stable and favorable regulatory environment for the innovation and development of cryptocurrencies and blockchain technology, to promote their healthy growth.
4. International Cooperation: As cryptocurrencies and virtual assets are transnational, VARA might collaborate with regulatory bodies in other countries to develop international standards and policies.
5. Market Oversight: VARA may monitor market activities to prevent market manipulation and other fraudulent practices, ensuring the stability and integrity of the market.

The Virtual Assets Regulatory Authority (VARA), the dedicated cryptocurrency regulatory body in Dubai, has reportedly imposed a ban on Islamic Coin (ISLM). This decisive action comes amid a detailed investigation linking a million-dollar wallet to activities related to terrorist financing and money laundering.

The ongoing inquiry by VARA unveiled concerning transactions within a wallet holding a substantial value of Islamic Coin. Investigators traced these transactions back to sources allegedly involved in terrorism and illicit money movements. This revelation prompted immediate regulatory intervention.

VARA's ban on Islamic Coin sends a strong message to the cryptocurrency market, emphasising the authority's commitment to ensuring a clean and transparent digital asset environment in Dubai. The move is seen as part of a broader strategy to combat financial crimes in the burgeoning crypto space.

The ban on the sale of cryptocurrencies like ISLM by VARA could be a measure to mitigate these risks, ensuring that digital currencies are not exploited for illicit activities such as money laundering and terrorism financing. The actions and policies of regulatory authorities like VARA are often guided by the need to address these complex challenges in the evolving landscape of financial transactions and digital currencies.