Cryptocurrency exchange Binance has strengthened its position in the United Arab Emirates (UAE). It has accomplished this by securing a crucial license in Dubai. The Dubai-based subsidiary of Binance, Binance FZE, has successfully obtained an operational minimum viable product (MVP) license from Dubai’s Virtual Asset Regulatory Authority (VARA).
This newly acquired license officially permits Binance to conduct cryptocurrency exchange activities. It also allows Binance to offer virtual asset broker-dealer services. The license further solidifies Binance’s regulatory relationship in the UAE and propels its expansion in the region.
New License Enables Binance Expanded Services to Select Investors
The services made possible by this license are currently restricted. They are available only to institutional investors and qualified retail investors based in Dubai. Binance pointed out that eligible investors in Dubai could now access authorized services. These include crypto-to-fiat exchanges that comply with the Financial Action Task Force (FATF) intergovernmental regulations.
To be a Binance user in Dubai, investors must fulfil certain criteria. They must qualify as a “retail client” under Dubai’s regulations. The eligible users should be at least 21 years old. They should also demonstrate the possession of 500,000 United Arab Emirates dirhams ($136,000) in net liquid assets. This must be supported by verifiable documents like bank statements and proof of funds.
Investors also need to provide valid identification. This can include passports, visas, and proof of valid UAE address and contact details.
Binance Dubai To Offer Broad Range Of Services
A Binance spokesperson confirmed that the company’s Dubai entity can now offer an array of services. These include crypto-to-fiat exchange and conversions, transfer and custody, and brokerage services. Also on offer are virtual asset payments and remittance services.
Binance’s latest regulatory accomplishment builds on the provisional MVP license that VARA issued in March 2022. Subsequently, Binance also received a preparatory MVP license in September 2022. In April 2023, VARA requested further information about Binance’s business requirements in an effort to tighten regulatory compliance in Dubai. Binance duly provided all requested information.
“This is a routine process between companies and regulators. We look forward to further cooperation with VARA as we prepare for the next licensing phase,”Official Spokesperson
Limited Capabilities and Compliance Conditions
There have been previous concerns about the preparatory MVP license offering limited capabilities. Bybit CEO Ben Zhou explained that the license only permits exchanges to service a very narrow set of accredited investors.
This announcement comes on the heels of VAR suspending the operational license of the crypto exchange BitOasis. The suspension was due to BitOasis’s failure to meet the stipulated conditions within the set timeframes. BitOasis is currently working with VARA to fulfil the remaining conditions.
On compliance conditions with VARA, the Binance spokesperson explained that the regulator’s framework includes mandatory rulebooks related to operations, compliance, and market conduct. Key highlights on these regulations were published by VARA in 2023, signalling a more rigorous regulatory landscape for the Binance Dubai operations.