The Dubai Virtual Assets Regulatory Authority (VARA) has fined Morpheus Software Technology FZE, better known as Fuze, for shortcomings in its anti-money laundering program and for conducting unlicensed virtual asset activity.
According to a notice on VARA’s website, the regulator found that Fuze’s AML governance, compliance systems, and internal controls were deficient. VARA also said the company breached its license conditions by intentionally carrying out unlicensed activity and failing to disclose those facts.
As part of the enforcement action, Fuze was handed a financial penalty and placed under ongoing supervision, with remedial actions to be overseen by an independent expert.
In a statement, Fuze said: “We have acknowledged the notice issued by the Virtual Assets Regulatory Authority (VARA) in relation to certain business activities conducted by our UAE entity, Morpheus Software Technology FZE. The matter relates to issues, which Fuze is addressing through a comprehensive remediation plan.”
The company stressed the matter concerned a defined set of historical transactions, adding that operations remain unaffected, including its core digital assets-as-a-service platform used by banks and fintechs across MENA.
Fuze said it had halted the relevant activities once VARA raised concerns, and has since bolstered compliance with new leadership hires — including a Chief Compliance Officer, Head of Risk, and Head of Legal — alongside external consultants and new board members. “The company remains committed to the highest regulatory standards and to delivering secure, compliant, and innovative wealth and payments infrastructure for institutional clients,” it added.
Backed by ADQ-linked Further Ventures, Fuze has been one of the fastest-growing digital asset infrastructure firms in the region. It raised a record $14 million seed round in 2023 and a $12.2 million Series A in May 2025 led by Galaxy, making it one of the best-funded startups in the Middle East crypto sector. Its partners include HexTrust, Aktif Ventures in Turkey, and UAE digital banks such as Fils and Wio Securities.
