The Central Bank of the United Arab Emirates (CBUAE) has recently taken stern regulatory action by revoking the licence of Malik Exchange, a prominent exchange house based in Abu Dhabi. This decisive step came after investigations uncovered serious breaches of the country’s anti-money laundering (AML) and counter-terrorism financing (CTF) laws. Alongside the licence revocation, Malik Exchange was also struck off the official register of licensed exchange houses operating in the UAE and imposed a financial penalty of AED 2 million. This action reflects the UAE’s uncompromising stance against financial crimes and its commitment to maintaining the integrity of its financial system.
The CBUAE’s decision, announced on August 20, 2025, followed an exhaustive examination that revealed Malik Exchange’s failure to comply with key provisions of Federal Decree Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations, including its subsequent amendments. The regulator did not disclose the full details of specific violations but emphasized that these infringements involved “violations and failures” related to the UAE’s AML and CTF framework. Such non-compliance undermines the regulatory standards designed to prevent illicit financial activities and protect the UAE’s financial ecosystem from abuse and exploitation.
The Central Bank highlighted that its supervisory and regulatory mandates require all exchange houses, their owners, and staff to operate strictly in accordance with UAE laws and regulations to safeguard the transparency and trustworthiness of the country’s financial transactions. The bank reiterated its ongoing commitment to ensure robust oversight and enforcement against entities that jeopardize the financial sector through unlawful practices.
This regulatory action against Malik Exchange is aligned with broader measures taken by the UAE authorities recently to crack down on money laundering and terrorist financing. Earlier in 2025, the Central Bank revoked the licence of Al Nahdi Exchange following significant AML compliance failures, as well as imposed hefty fines on various financial entities for lapses in adhering to AML/CTF requirements. These steps come as the UAE intensifies its efforts to bolster its regulatory framework and enforcement capabilities to combat economic crime effectively.
In addition to Malik Exchange’s case, the UAE Central Bank has been vigilant in monitoring and sanctioning other financial institutions and exchange houses exhibiting AML framework deficiencies. For example, in May 2025, the regulator levied AED 200 million in financial sanctions against an unnamed exchange house for significant AML regulatory breaches, signaling a zero-tolerance approach to such misconduct.
The enforcement actions are part of the UAE’s larger strategy outlined in its 2024-27 National Strategy to enhance measures against illicit financial activities, including AML, counter-terrorism funding, and proliferation finance. This comprehensive strategy encompasses legislative and regulatory reforms aligned with international standards and is supported by newly established federal prosecution offices dedicated to investigating financial crimes.
The CBUAE’s move to revoke Malik Exchange’s licence also sends a strong message to other financial entities about the importance of maintaining rigorous compliance frameworks and the serious consequences of neglecting regulatory obligations. The financial penalty imposed reflects not only the severity of Malik Exchange’s violations but also the Central Bank’s resolve to enforce accountability at both organizational and individual levels.
The UAE has made significant advancements in its regulatory landscape concerning anti-money laundering and combating terrorism financing, which was recognized globally. In recent developments, the European Union removed the UAE from its list of countries deemed high risk for money laundering and terrorist financing—a testament to the progress made by UAE financial authorities.
The CBUAE continues to emphasize the critical role of financial institutions in safeguarding the UAE’s financial system from illicit activities and stresses that all licensed exchange houses must implement stringent internal controls, effective risk assessment procedures, and transparent reporting mechanisms in line with the law. The Central Bank remains vigilant to detect and deter any attempts to exploit the financial services sector for unlawful purposes.
In summary, the licence revocation and significant fine imposed on Malik Exchange by the UAE Central Bank demonstrate a robust regulatory enforcement stance against breaches of AML laws. This action underscores the UAE’s comprehensive approach to preserving the integrity and transparency of its financial system, protecting it from money laundering, terrorism financing, and other illegal activities. Financial entities operating in the UAE are reminded of the critical importance of compliance and are encouraged to align their operations with the highest standards set by national and international regulatory frameworks.
The Central Bank’s firm response highlights its commitment to the ongoing enhancement of the UAE’s regulatory environment, ensuring that the country remains a secure and trusted global financial hub.