With the spread of FTX affecting various sectors of the global crypto ecosystem, industry leaders in Dubai commented on how the debacle will affect the emerging crypto hub within the United Arab Emirates (UAE).

From tighter regulation to better project leadership, various professionals offer their views on how the crypto landscape in Dubai and the UAE will be affected by the collapse of FTX exchange.

Kokila Alagh, founder and CEO of KARM Legal Consultants, believes that the FTX debacle will lead to more scrutiny and due diligence before the project is approved in Dubai’s licensing process. She explained:

“Because of FTX’s misuse of funds or limited disclosure, these licensing bodies now need to delve into the technology. Just filing financial documents is not enough, continuous and real-time monitoring of these platforms may be one of the ways forward.”

Alagh also told Cointelegraph that the FTX debacle could lead to better projects taking the lead in the space. “Any major setback in the growing industry will allow stronger programs to lead the way and weed out those that don’t have solid foundations,” she added.

Irina Heaver, a partner at Keystone Law Middle East, agrees that stricter regulation is on the horizon. Heaver told Cointelegraph that founders must prepare for increased scrutiny from authorities as well as users and investors. She explained:

“Each of them must also implement stricter internal compliance and audit functions, consult lawyers when in doubt, and take additional steps beyond what is currently required to demonstrate to users that the project is doing the right thing.”

According to Heaver, authorities must also consider taking a closer look at influencers who promote “rug-pulling, pump-and-dump schemes, and fake token sales.” Citing Shark Tank star Kevin O’Leary’s promotion of the FTX exchange and how people are persuaded to put money into FTX, Heaver argues that promoters must also face scrutiny.

Meanwhile, Talal Tabbaa, CEO of trading platform CoinMENA safe The provisional permit from VARA said Dubai’s history is full of great challenges and examples of rising to the occasion. He explained:

“The collapse of one company will not change the vision of the UAE as a global crypto hub. In fact, the FTX incident confirms how important it is to have a comprehensive regulatory framework in place.”

The executive also noted that the Luna, Voyager, Celsius, and FTX incidents were failures of governance and effective risk management, not cryptocurrencies. “They are institutional failures, not technical failures,” he noted. According to Tabbaa, this distinction is important.

The CoinMENA CEO also compared the event to the dot-com bubble. According to Tabbaa, when the dotcom bubble burst, it wasn’t the internet’s problem, it was the failure of internet-based companies. The executive noted that the same thing applies to the crypto space at the moment.

related: FTX Contagion: Which Companies Are Affected by the FTX Crash?

FTX Exchange was one of the first exchanges to receive approval from Dubai’s Virtual Assets Regulatory Authority (VARA), the regulator that oversees virtual asset service providers aiming to operate locally. In July, the FTX exchange was approved under the Minimum Viable Product (MVP) program to continue testing and operations.

However, VARA recently withdrew its approval for FTX’s native trading platform, FTX MENA, in light of the situation with the FTX exchange. The regulator also confirmed that the entity has not yet been approved to take on clients, confirming that no clients have been exposed.