Dubai is paying closer attention to companies applying for crypto licenses. The emirate is especially concerned following the implosion of FTX last year.
The Virtual Assets Regulatory Authority (VARA) in Dubai has asked Binance and other companies to provide more information on their ownership, management, and auditing processes. This request reportedly extends to all international firms seeking permits. According to sources, Dubai is attempting to balance innovation with a strict approach to regulation.
However, this could prove a headache for Binance, which has been under pressure from US regulators in recent weeks.
According to sources, Binance’s complexity has resulted in longer response times for those inquiries. Binance lacks a worldwide head office and instead employs a global advisory board as opposed to a conventional board of directors. Additionally, Binance’s corporate structure is complex, with various holding companies, including three cited in the CFTC lawsuit, and a range of local entities.
Dubai Crypto Licenses Are Notoriously Complex
Binance told Bloomberg News that:
“We have disclosed all necessary answers to VARA on a proactive basis and in line with our regulatory and fiduciary responsibilities.”
Binance wants to start trading cryptocurrencies in Dubai using its Binance FZE group. The group’s auditor is Mazars, the same accountancy firm that provided Binance’s controversial “agreed-upon-procedure” (AUP) last year following the FTX crash. CZ later claimed it was a full audit.
However, Binance told Bloomberg the launch of Binanze FZE has been delayed due to “operational reasons.” Who owns Binance FZE is also not listed on UAE’s federal registry.
The exchange is trying to obtain an Operational MVP license to widen its services. An Operational MVP would allow it to offer services to institutions and qualified investors in Dubai. After this, it will seek a Full Market Product permit, which VARA will launch in June. An FMP crypto license would allow companies to offer cryptocurrency trading to all retail investors.
Yesterday, the exchange announced an expansion of services in Argentina. This will allow users to directly trade digital currencies with local pesos. Prior to this, Binance only operated as an intermediary platform to connect buyers and sellers of crypto in Argentina.
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