 | Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here! |
(Kitco News) -
Binance, the world’s largest cryptocurrency exchange, has achieved another landmark in its journey towards full regulation in Dubai, becoming the first crypto firm to secure an operational license in the Middle Eastern financial hub.
“We are pleased to announce that our Dubai subsidiary, Binance FZE, has become the first exchange to receive the Operational Minimum Viable Product (MVP) license from Dubai's Virtual Asset Regulatory Authority (VARA),” the company announced on July 31.
The Operational MVP license means Binance can now offer regulated services in Dubai, including exchange and broker-dealer services, albeit limited to institutional and qualified retail investors, which are individuals aged 21 or more who can prove UAE residence and net assets of at least $136,000.
It follows VARA’s issuance of a provisional MVP license in March 2022, and a preparatory MVP license in September of the same year.
“This landmark development underscores our dedication to building a compliant exchange in partnership with local regulators and within Dubai's unique regulatory framework for Virtual Asset Service Providers (VASPs),” Binance wrote. The Operational MVP License “means eligible users in Dubai will now be able to access authorized services, including the ability to safely convert virtual assets to fiat under VARA-designated standards compliant with the intergovernmental Financial Action Task Force.
Qualified institutions and individuals can use these services “knowing they’re under investor protection and market assurance standards tailored specifically for the virtual asset sector,” the company said.
“Operating within this regulated ecosystem, we are committed to ensuring secure and seamless customer migration, with robust Know-Your-Customer and Customer-Due-Diligence as part of the rigorous onboarding remediation as stipulated by VARA,” said Richard Teng, Head of Regional Markets at Binance. “Our priority is to be able to operate this first fully regulated exchange in, and from Dubai, in a FATF-compliant ecosystem, setting the stage for global scalability with uncompromised user assurance.”
On March 31, Teng told Reuters that they were recruiting over 100 positions in the United Arab Emirates (UAE) and were helping to shape Dubai's new virtual assets regulations
“It is a very progressive framework and we are very happy to be part of that process, working very closely with the Dubai government,” Teng said at the time. “I wish more regulators globally adopt this approach that Dubai has - a public-private sector partnership.”
Binance’s relationships with other regulators remain fraught, however. On July 26, the company’s attorneys requested a dismissal of the lawsuit filed by the Commodity Futures Trading Commission (CFTC), saying the regulator exceeded its authority and engaged in regulatory overreach when it filed the lawsuit in March alleging the exchange broke U.S. trading and derivatives rules.
The CFTC lawsuit included allegations that the company offered unregistered derivatives products in the U.S., including cryptocurrency trading services, futures and options products, lacked a reliable Know Your Customer (KYC) or Anti-Money Laundering (AML) program, and failed to register as a futures commissions merchant, designated contract market or swap execution facility.
And on July 4, the Australian Securities and Investments Commission (ASIC) conducted searches at multiple Binance Australia locations. The searches were related to Australia’s ongoing probe of Binance’s local derivatives business, which was shut down in April after the ASIC canceled the exchange’s derivatives license.
