The Dubai Virtual Assets Regulatory Authority (VARA) has issued a notice on its website stating that it has fined Morpheus Software Technology FZE. The firm, also known as Fuze, is a licensed VASP digital asset infrastructure provider after it identified failures in its AML (anti-money laundering) program.
VARA identified failures in Morpheus’ (Fuze) anti-money laundering (AML) program, related governance, compliance, and internal systems and controls. Furthermore, Morpheus (Fuze) was found to have intentionally conducted unlicensed VA activity, breaching its license conditions, and further failed to disclose those material facts to VARA.
VARA took enforcement actions, including a financial penalty against Morpheus (Fuze), and will be under ongoing supervision by VARA to ensure fulfillment of remedial actions to secure the marketplace and protect consumers.
FUZE issues statement on VARA notice and fine
In a statement provided to Cryptopolitan by Fuze, the company noted, “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.”
As per the statement, the matter concerns a defined set of historical transactions. It also clarified that as soon as VARA brought the matter to its attention, it took immediate steps to investigate internally, halt the activity and address the concerns raised.
The statement added that there has been no effect on business operations, including its core digital assets as a service platform, which serves numerous banks and fintechs in the MENA region.
Moreover, Fuze continues to hold its full license and regulated entity within the UAE, Morpheus Software Technology FZE.
Currently, Fuze is cooperating fully with VARA, having acknowledged its findings and implementing a remediation plan under the supervision of an independent expert appointed by VARA to ensure its effective execution.
The company has also strengthened its leadership team, with the appointment of a Chief Compliance Officer, Head of Risk, and Head of Legal, and the addition of experienced board members. Governance and oversight have been further enhanced through the engagement of external compliance consultants and the reinforcement of internal systems.
As per the statement, “The company remains committed to the highest regulatory standards and to delivering secure, compliant, and innovative wealth and payments infrastructure for institutional clients.”
The Growth of Fuze in MENA
Fuze, a digital assets infrastructure provider, has witnessed significant growth over the past few years in the MENA region. The company offers a wide range of digital asset solutions for payments, stablecoins, OTC, and more.
In May 2025, Galaxy led a $12.2 million Series A funding round in Fuze. Fuze had been championed from the beginning by Further Ventures, an ADQ-backed venture builder and investment firm out of the UAE.
In 2023, the company raised a seed round of $14 million, the largest seed investment in a digital assets startup in the history of the Middle East and North Africa region (MENA).
Fuze has partnered with various crypto fintech entities, including HexTrust, Aktif Ventures in Turkey and others. It also serves several crypto exchanges, digital banks in the UAE including names such as Fils, Wio Securities.
