Binance FZE, the Dubai-based subsidiary of the world’s largest cryptocurrency exchange, has achieved a significant milestone by obtaining a license from Dubai’s Virtual Assets Regulatory Authority (Vara). This operational Minimum Viable Product (MVP) license allows Binance FZE to offer exchange and broker-dealer services to retail and institutional investors from its Dubai office.
By receiving the MVP license, qualified users of Binance FZE will have access to authorized services, including the secure conversion of virtual assets to fiat with compliance standards set by the Financial Action Task Force. The license also aims to provide heightened investor protection and market assurance standards tailored for the virtual asset sector, benefiting UAE residents and global consumers using Binance FZE.
Richard Teng, the head of international markets at Binance, expressed his gratitude for being the first exchange to be granted such an operational MVP license by Vara. He highlighted that this achievement results from extensive due diligence, collaboration, and a demonstration of responsible intent. The license signifies a progressive regulatory framework that fosters innovation while ensuring user protection.
In Vara’s process, an MVP is an early version of a service to assess its market fit and gather feedback before reaching Full Market Product (FMP) status. The operational license marks the final step in Vara’s MVP process, following the preparatory and provisional stages.
Dubai’s regulatory approach to virtual assets aims to create a safe environment for investors while embracing the opportunities presented by emerging technologies. Vara was established by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, in March 2022 under the Dubai Virtual Asset Regulation Law – the first of its kind in the emirate. It aims to establish a robust legal framework that protects investors and fosters responsible business growth by implementing international standards for virtual asset industry governance.
Binance’s journey towards obtaining the operational license started with a preparatory MVP license issued by Vara in September of the previous year. The company had to fulfill certain conditions before being authorized to operate.
Amidst the growth and development in Dubai’s virtual asset sector, Alexander Chehade, Binance Dubai’s general manager, expressed excitement to be a part of the city’s emergence as a global virtual asset hub.
While the cryptocurrency sector has experienced significant challenges, including the collapse of major platforms like Celsius, Three Arrows Capital, and FTX, Binance FZE’s latest achievement demonstrates the resilience and progress of the industry.
Despite the crypto winter’s impact, Bitcoin has shown signs of recovery, with its price crossing the $30,000 mark in May, though still down by more than 50% from its peak in November 2021.
It is worth noting that Binance has faced scrutiny from US authorities, including the Securities and Exchange Commission and the Commodities Futures Trading Commission, over securities law breaches and customer funds’ alleged misuse. The company has acknowledged compliance gaps and is anticipating a fine to resolve the investigations.