Binance was awarded Dubai’s Minimal Viable Product (MVP) license, allowing full operation of the world’s largest crypto exchange in the region.
Dubai’s Virtual Asset Regulatory Authority (VARA) issued the operating license to Binance after reportedly meeting all of the operational, technical, and security requirements outlined by the local regulators.
The milestone comes nearly six months after Binance has secured its preliminary authorization to establish a crypto-asset business, paving the way for it to begin operations within the country. Before that, it was granted an “in-principle” decision, which was the first stage of the full authorization process whereby the applicant needs to satisfy on one or more requirements in order to obtain a license.
Back in March 2022, Binance was among the first crypto platforms to receive Dubai’s virtual asset exchange (VAX) license soon after the regulators signed off the virtual assets law and established the Dubai VARA.
The provisional approval allowed the exchange to conduct a spectrum of virtual assets business under the initial regulatory phase of VARA, which serves as the single custodial entity mandated to license and govern crypto activities in Dubai. This includes offering exchange products and services to pre-qualified investors and professional financial service providers under strict oversight and mandatory FATF compliance controls.
With the transition to an MVP approval, Binance can open client money accounts with a domestic bank and provide various services to qualified customers. The exchange has been approved to deploy conversion between virtual assets and fiat currencies, as well as crypto payments and remittance services. In addition, Binance can also act as a clearing house, operate tokens marketplace, and provide custodial services across the region.
Changpeng Zhao (CZ), founder and CEO of Binance, commented: “VARA’s unique operating model is setting a benchmark for the global industry, and this most recent registration is an acknowledgement of our compliance and safety processes in the new regulatory framework. We strongly believe there is a significant opportunity to work with our industry peers to develop consistent implementation standards around the world as we have been doing in Dubai.”
Helal Saeed Almarri, chairman of VARA added: “We are pleased to have Binance licensed to operate within the VARA MVP Programme. The VARA regime aims to strike an effective balance between value creation and risk mitigation, enabling open market innovation while assuring protection for the economically vulnerable. The MVP Phase, is designed for select global players across the value chain, that are committed to responsible industry participation and VARA looks forward to Binance being an active contributor, reinforcing Dubai’s commitment towards creating a next-gen secure ecosystem for this future economy.”
Binance’s regulatory foray into Dubai is not surprising. After all, the emirate has one of the most progressive climates for digital assets in the world. In fact, the UAE was the first global economy to have set up a specialised regulator for the virtual asset sector. Announced by the ruler of Dubai, Sheikh Mohammed Bin Rashid, the emirate has enacted its first law governing cryptocurrency activities, and it has also formed an independent regulator to supervise the sector.
