According to Bloomberg, Dubai’s Virtual Assets Regulatory Authority (VARA) has requested Binance, the largest cryptocurrency exchange by trading volume, to provide more information about its business operations. The Dubai regulator body has asked for details on the exchange’s ownership structure, governance, and auditing processes, alongside board procedures at a global group level. The Dubai crypto regulator has also requested similar information from other international crypto players seeking to license in Dubai.
The increased scrutiny over virtual asset service providers (VASPs) in Dubai is part of an effort to tighten regulatory measures in the emirate. Binance, in particular, is facing increased pressure from regulators in the United States, with the Commodity Futures Trading Commission filing a lawsuit against Binance and its CEO, Changpeng Zhao. The lawsuit alleges that the exchange engaged in improper compliance procedures and trading.
My Response to the CFTC Complaint | Binance Blog https://t.co/TadyotM7HN— CZ 🔶 Binance (@cz_binance) March 27, 2023
Binance received a preparatory minimal viable product (MVP) license from VARA in September 2020, which allowed the platform to set up an office in the United Arab Emirates and offer digital asset exchange services to pre-qualified investors. However, the company must still provide locally regulated digital asset services in the emirate. To deliver services to qualified individual and institutional investors and secure a full market product permit, Binance must submit the requirements to VARA to upgrade to an operational MVP license.
Only digital asset custodian Hex Trust has secured an operating MVP license from the Dubai regulator. VARA’s website states that VASPs already providing their services must comply with their requirements before the end of June.
Binance has faced regulatory action in various jurisdictions worldwide, including the UK, Japan, and Germany. The regulatory actions have led the exchange to restrict its services in some jurisdictions, including the United States. The increased regulatory scrutiny of Binance and other global crypto players highlights the growing concern among regulators regarding the potential for illegal activities such as money laundering and terrorist financing in the crypto industry.
In conclusion, Dubai’s VARA has requested more information from Binance regarding its business operations as part of an effort to tighten regulatory measures in the emirate. The regulatory body has also asked for similar information from other global crypto players seeking to license in Dubai. Binance received a preparatory MVP license in September 2020 but has yet to offer locally regulated digital asset services in Dubai. The increased regulatory scrutiny on Binance and other global crypto players highlights the growing concern among regulators regarding the potential for illegal activities such as money laundering and terrorist financing in the crypto industry.