Cryptocurrency platform FTX receives 'viable product' licence from Dubai regulator

FTX becomes the first virtual asset service provider to receive a licence to operate its virtual asset exchange and clearing house services in the emirate

The approval by UAE authorities will allow FTX to tap into more markets within the Middle East and North Africa region, the company says. AFP

FTX Exchange, the Middle East division of cryptocurrency platform FTX Europe, has secured approval to enter Dubai’s minimum viable product (MVP) programme for virtual assets, operated by the emirate's Virtual Asset Regulatory Authority (Vara).

The move makes FTX the first virtual asset service provider to receive an MVP licence to operate its virtual asset exchange and clearing house services in Dubai, the San Francisco-based company said in a statement on Friday.

The MVP phase, which is exclusive to "select and responsible" international players, will allow the authority to prudently structure guidelines and risk mitigation levers for secure commercial operations, Helal Almarri, director general of the Dubai World Trade Centre Authority, which houses Vara, said.

“Vara’s operating model, based on our unique test-scale-adapt principle designed for secure and sustainable growth, is reflective of Dubai’s commitment to creating a globally interoperable model for the future economy," he said.

Dubai's cryptocurrency regime is gaining traction, with Vara granting licences to a number of global crypto platforms as the emirate continues to integrate virtual assets into its system.

This month, crypto platforms OKX and Huobi, which are both based in the Seychelles, and Singapore's Fintonia Group received provisional licences from Vara.

In March, FTX received a provisional licence to prepare itself to trial complex crypto derivatives dedicated to professional institutional investors in the UAE. The licence, issued under prudential supervision, allowed FTX to operate within Dubai's “test-adapt-scale” virtual assets market model.

In July 2021, the then two-year-old company secured $900 million in a new funding round — one of the largest for a crypto company — valuing it at about $18 billion.

With Vara's letter of approval, FTX Exchange will operate under a model that has "rigorous" regulatory oversight and mandatory compliance with the Financial Action Task Force, the global body founded by the Group of Seven nations to combat money laundering, Sam Bankman-Fried, chief executive of FTX, said.

The move will also allow FTX to tap into more markets within the Middle East and North Africa region, said Patrick Gruhn, head of FTX Europe.

Vara was established by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, in March under the Dubai Virtual Asset Regulation Law, the first law in the emirate that regulates virtual assets.

In May, Vara said it had entered into the metaverse with the establishment of its Metaverse HQ, making it the first regulator to have a presence in the emerging digital space.