Binance Becomes First Exchange Granted Operational MVP License In Dubai
- Dubai’s Virtual Assets Regulatory Authority grants Binance FZE the Operational MVP license, making it the first exchange to receive such a license in the region.
- The license enables the exchange to offer virtual asset exchange and broker-dealer services to institutional and qualified retail investors in Dubai.
Dubai’s Virtual Assets Regulatory Authority (VARA) has granted Binance FZE, the Dubai subsidiary of cryptocurrency exchange Binance, the Operational Minimum Viable Product (MVP) license.
This milestone achievement marks Binance FZE as the first exchange to receive such a license in Dubai, allowing the company to operate virtual asset exchange and broker-dealer services, initially catering to institutional and qualified retail investors in the region.
The path to obtaining the operational MVP license involved a series of successful milestones. Binance secured a provisional MVP license in March 2022 and followed up with a preparatory MVP license in September of the same year. With this latest development, the exchange is now permitted to engage in two licensed activities – virtual asset exchange services and virtual asset broker-dealer services, limited to institutional and qualified retail investors in Dubai.
The issuance of this operational MVP license reflects Binance’s commitment to building a compliant exchange in collaboration with local regulators and within the unique regulatory framework for Virtual Asset Service Providers (VASPs) in Dubai. It also enables eligible users in the city to access authorized services, including converting virtual assets to fiat safely, adhering to VARA-designated standards compliant with the intergovernmental Financial Action Task Force.
The United Arab Emirates (UAE) enthusiastic adoption of blockchain technology has contributed to a thriving industry, with security and innovation as key aspects. Binance’s involvement in VARA’s virtual asset ecosystem and adherence to Dubai’s regulatory regime reflects its commitment to supporting the UAE’s vision for the virtual asset space.
However, outside the UAE, Binance has faced challenges in other regions. Germany’s financial regulator, BaFin, advised the exchange to withdraw its license application due to concerns about its founder and the company’s complex structure. BaFin believed that Binance’s founder, Changpeng Zhao, would not pass the “fit and proper” test, raising doubts about his suitability to run or own a regulated business. Additionally, BaFin cited concerns about Binance’s structure hindering regulatory supervision.
Despite these challenges, Binance continues to seek licenses in various countries, aiming to operate in compliance with local regulations. The company has faced scrutiny in Europe, where some regulators have denied it permission to conduct business. Furthermore, in the U.S., the exchange is undergoing a criminal investigation by the Justice Department.
Binance’s regulatory journey in Dubai represents a significant step towards a future of regulated, secure, and customer-centric virtual asset services within the UAE and beyond. The company remains committed to operating as a fully compliant exchange, leveraging the potential of a progressive regulatory framework while prioritizing user protection and market assurance.
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