July 31, 2023 at 12:54 GMTModified date: July 31, 2023 at 12:54 GMT
July 31, 2023 at 12:54 GMT

Binance secures virtual asset licence in Dubai

Binance has now become the first exchange in the world to secure an Operational Minimum Viable Product (MVP) licence in Dubai.

Binance secures virtual asset licence in Dubai

Binance has now become the first exchange in the world to secure an Operational Minimum Viable Product (MVP) licence in Dubai. The green light was given by the country’s Virtual Assets Regulatory Authority (VARA).

The licence will enable Binance FZE, which is the exchange’s Dubai subsidiary, to offer services in the country. This includes exchange and broker-dealer services. However, this would be limited to institutional and qualified retail investors initially.

Back in March 2022, Binance had bagged a provisional MVP licence which was followed by a preparatory MVP licence in September 2022. Now, VARA has given its official permission to Binance to operate two licensed activities: virtual asset exchange services and virtual asset broker-dealer services.

Now that Binance has progressed from its provisional licence, its eligible users in Dubai will be able to access authorised services. This includes the ability to safely convert virtual assets to fiat under VARA-designated standards compliant with the intergovernmental Financial Action Task Force.

The investor protection and market assurance standards tailored specifically for the virtual asset sector provided by this licence would also encourage institutions and residents (who qualify) to use these services. Any licensees who seek to provide regulated virtual asset services in the country should adhere to these requirements.

Talking about how the latest licence has encouraged the exchange to foster innovation while furthering user protection, Head of Regional Markets at Binance, Richard Teng 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. 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.”

The exchange has demonstrated continued commitment in the UAE to create a thriving blockchain industry with security and innovation as complementary assets at its core. It also looks forward to growing even more Web3 opportunities in line with the Dubai government’s regulatory regime and guidance.

The exchange’s Dubai’s General Manager, Alexander Chehade, commented on the same saying: “The last few years have cemented Dubai as a global virtual asset hub and we are excited to be a witness to that growth as we build on our operations here, with continued commitment to market and investor security.”

The recent feat came in as the world’s largest cryptocurrency exchange continues to struggle with regulatory issues in many other countries. In the U.S., it has been in a difficult position with two of the country’s top watchdogs, Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

The month of July also saw Binance’s office in Australia getting searched by local regulators as part of an ongoing probe into the cryptocurrency exchange. However, its works in Dubai showed Binance’s commitment to building “a compliant exchange in collaboration with local regulators”.

The official announcement further said: “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).”