Global cryptocurrency exchange FTX has received a virtual asset licence to set up regulated trading and clearing services in Dubai.
FTX Europe, the company's newly established European division, is now the “first fully regulated virtual asset exchange to trial complex crypto derivatives dedicated to professional institutional investors within a reputed international jurisdiction”, the company said in a statement.
The licence, issued under prudential supervision, allows FTX to operate within Dubai's “test-adapt-scale” virtual assets market model, “which has rigorous regulatory oversight and mandatory FATF [Financial Action Task Force] compliance controls that are similar to the requirements of Tier 1 international financial markets”, it said.
“It's an honour to be one of the first approved applicants in such a specialised category and we are excited to be able to introduce complex crypto-derivatives products with centralised counterparty clearing to institutional markets,” FTX chief executive Sam Bankman-Fried said.
FTX aims to play a key role in “advancing the digital asset industry in countries that provide a robust regulatory framework, while also operating with the highest security, risk and investor protection standards”, he added.
The Dubai Virtual Asset Regulation Law aims to create an advanced legal framework to protect investors and provide international standards for virtual asset industry governance that will promote responsible business growth in the emirate.
The emirate also established the Virtual Asset Regulatory Authority (VARA) as an “independent authority” to regulate the sector throughout the emirate, including special development zones and free zones, but excluding the Dubai International Financial Centre.
The authority, which will also be responsible for licensing, has legal and financial autonomy over the virtual asset sector and will be linked to the Dubai World Trade Centre Authority (DWTCA).
Dubai views the virtual assets industry as an accelerator for the future global economy, said Helal Saeed Al Marri, director general of the DWTCA.
“Our VARA regime is structured to catalyse collaboration, foster innovation and most critically prioritise public protection … licensing FTX within this specialist regime reflects our focus on enabling only the most credible global players that demonstrate a consistent commitment to future-proof this sector,” said Mr Al Marri.
The UAE government is taking concrete steps to establish a strong digital economy and make use of the advantages provided by digital transformation.
The digital economy contributes about 4.3 per cent to the UAE's gross domestic product, which is equivalent to Dh100 billion ($27.2bn), government figures show.
“It is a major achievement for FTX to be approved as the first exchange under this unique regulatory framework,” said Patrick Gruhn, head of FTX Europe.
“I am excited to expand our presence in Mena [Middle East and North Africa] especially as countries like the UAE continue to set a new bar when it comes to crypto regulation,” Mr Gruhn said.
FTX offers various products, including derivatives, options and volatility products, tokenised stocks, prediction markets and leveraged tokens. Last week, FTX Trading established FTX Europe by securing approval from the Cyprus Financial Market Regulator.