Crypto License Matter
The collapse of one of the largest digital asset exchanges, FTX, last year has prompted Dubai’s Virtual Assets Regulatory Authority to strengthen its examination of crypto license applicants.
Some sources have also asserted that Dubai’s Virtual Assets Regulatory Authority has asked Binance and other foreign businesses applying for permits for further information, including specifics on ownership structure, governance, and auditing methods.
The largest cryptocurrency exchange platform Binance, along with its CEO Changpeng “CZ” Zhao, who is currently residing in Dubai and has made it a key location for the company’s expansion in the Middle East, is under scrutiny from the US regulators in addition to the Virtual Assets Regulatory Authority of Dubai.
This action is reportedly part of Dubai’s efforts to strike a balance between encouraging innovation and appropriate oversight. This has its roots in the cryptocurrency sector, which has endured a year of high-profile scandals.
In this prominent scandal, Binance is being sued by the US Commodity Futures Trading Commission. The aforementioned regulator charged the corporation with breaking derivatives laws and using “false” compliance processes. In which the lawsuit was described as “unexpected and disappointing” in the relevant discussion.
According to reports, the Dubai Virtual Assets Regulatory Authority is looking for details about the global group-level ownership, auditing, and board practices of Binance. The size and complexity of the organization are thought to be causing this to take longer to resolve.
Given that Binance has numerous holding companies and local businesses, it is important to note that it has a convoluted corporate structure. You may recall that the company has previously announced that it will choose to employ an auditor to review its whole balance sheet, but they have also acknowledged that it had trouble locating a company willing to take on the project.
UAE Stifles Unlicensed Cryptocurrency Exchanges
The United Arab Emirates (UAE) is preparing to crack down on unlicensed cryptocurrency exchanges as part of a larger campaign to be removed from the Financial Action Task Force’s “gray list” of states deemed insufficient in detecting illicit funds.
Several unlicensed over-the-counter cryptocurrency exchanges operating in Dubai, according to sources, have been the target of regulators. However, the request for comments has not yet received a response from the UAE foreign ministry.
There are currently just four licensed virtual asset service providers in the company. This includes Crypto.com, Hex Trust, Komainu, and Binance. However, Binance and the other three businesses are only able to give permissions for minimally functional prototypes. In essence, this indicated that they are unable to provide locally regulated digital asset services in Dubai at this time.