After satisfying the necessary prerequisites for a preparatory license acquired in September 2022, Binance, the world’s largest cryptocurrency exchange, has been granted the Operational MVP License to operate in Dubai. The Dubai-based subsidiary, Binance FZE, now possesses authorization from Dubai’s Virtual Asset Regulatory Authority (VARA) to open a local bank account to hold client funds, operate a crypto exchange, and deliver payment and custody solutions.
Yet, a clear demarcation line exists. The services are currently limited only to institutional and qualified retail investors present in the area. Pertaining to the recently achieved Operational MVP License, now eligible candidates in Dubai can employ the sanctioned services inclusive of safe translation of virtual assets to fiat followed by the standards listed by the intergovernmental Financial Action Task Force.
While this uptick in regulation might seem beneficial, the task of attaining the status of a “Qualified retail client” isn’t minor; among other requirements, it necessitates verification of net liquid assets worth 500,000 United Arab Emirates dirhams ($136,000).
Meanwhile, as the mist of uncertainty hover over the global crypto industry, Dubai’s crypto world has embraced a novel regulatory framework with the intent of becoming a global center for blockchain and crypto activities. It aims to construct a protective shield for digital asset issuers and service providers, a game-plan that has received thumbs up from industry participants.
Still, successfully navigating Dubai’s four-stage licensing procedure isn’t a cakewalk. The last lap, Full Market Product (FMP) license, stands between Binance and complete regulatory compliance.
Binance has crossed significant milestones in Dubai. Still, the exchange’s path is not all paved with roses as it continues to grapple problems in foreign markets, particularly legal issues from regulators for its U.S. arm operating an unregistered platform, and regulatory complications in Germany, Austria, Belgium, and the Netherlands.
While the inclusion of new guidelines is optimistic for some investors, it could potentially exclude a large chunk from entering dubai’s crypto market. It remains to be seen if these regulations are the harbinger of substantial safety measures or a deterrent for potential crypto enthusiasts in the region.
Source: Cryptonews
