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Environment error: Hypervisor framework fails

Docker for Mac was working fine on my machine.
I had to reinstall macOS Big Sur and docker.

Now, when I start Docker, i get the following error:

“Environment error: Hypervisor framework fails”.
My Mac mini (late 2014) cpu supports virtualization.

zabano@sinan ~ % sysctl kern.hv_support
kern.hv_support: 1

Please help. Not sure why this is happening.