Following formal approval, Dubai’s institutional and qualified retail investors will benefit from Binance’s crypto services.
Binance, a major cryptocurrency exchange, has attained another milestone in its ties with United Arab Emirates’ regulators by acquiring a new license in Dubai.
A July 31 announcement indicated that Binance FZE, the cryptocurrency exchange’s Dubai-based branch, has been offered an operational minimum viable product (MVP) by the Virtual Asset Regulatory Authority (VARA). The permit demonstrates that Binance is formally permitted to offer crypto exchanges and virtual asset broker-dealer services.
Binance Offering Restricted Services to Select Retail and Institutional Investors
Binance noted that the services the license enables are restricted to institutional and qualified retail investors in Dubai. Right now, qualified investors can access services, for instance, crypto-to-fiat exchanges that adhere to the International Financial Action Task Force (FATF). For one to be a Binance user in Dubai, having a ‘qualified retail client’ status in the city is necessary.
Qualified persons involve persons aged a least 21 and those capable of evidencing net liquid assets worth 500000 United Arab Emirates dirhams ($136000). Presenting documentary evidence, for instance, proof of funds and bank statements, is also crucial.
Binance to Deploy Strict Know Your Customer Policy
Eligible investors must also provide legal identification documents, for instance, visas, passports, and evidence of valid United Arab Emirates contact and address details. A Binance spokesperson revealed that Binance’s Dubai entity currently provides services, for instance, crypto-to-fiat exchange, conversions, transfer, and custody. It also provides intermediary services, virtual asset payments, and remittance services.
The current regulatory milestone by Binance rests on the advancement from the temporary MVP approval VARA provided in March 2022. In September 2022, Binance acquired an introductory MVP approval.
In April 2023, Binance was requested to offer additional data concerning its business requirements. This move sought to strengthen the regulatory requirements in Dubai.
A Binance spokesperson divulged that all the requested data was presented and added that this is a normal process between regulators and firms. Besides, he claimed that extended cooperation with VARA was crucial for the next licensing stage.
Binance Commits to Comply with Strict Rulebook from VARA
Some crypto exchanges claimed that the preparatory MVP permits provide restricted capabilities. Bybit’s CEO, Ben Zhou, clarified that it only permits exchanges to service ‘an extremely limited group of accredited investors.’This news comes following the suspension of BitOasis’s operational permit license by VARA for failing to meet authorized conditions within the set-out timeframes. Later, the company claimed it was working with the regulator to satisfy the conditions.
Binance spokesperson confirmed that fulfilling the required compliance conditions is mandatory to secure VARA’s approval. The executive expressed the crypto exchange’s readiness to align operations guided by the framework conveyed by the regulator. He observed that it entails mandatory rulebooks associated with compliance, general operations, and requirements of the market conditions, as published in 2023.
Dubai permit offers reprieve for Binance following the series of exit from several European markets. The crypto exchange suffered a regulatory setback in the Netherlands when a local regulator denied its license application citing noncompliance with money laundering.
Besides the Netherlands, Binance had previously applied to delist from Cyprus to pursue the mature markets. The Changpeng Zhao-led crypto exchange would exit Belgium under cease-to-operate orders, followed by the UK and Germany. Expansion into Dubai is a critical milestone as it also reenters the Japanese market.
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