Binance FZE, the Dubai-based subsidiary of the world’s biggest cryptocurrency exchange by trading volume, has received a licence to provide exchange and broker-dealer services in Dubai from the emirate’s Virtual Assets Regulatory Authority.
The operational minimum viable product licence will allow Binance FZE to provide services to qualified retail and institutional investors from its Dubai office, the company said on Monday.
The operational MVP licence will help qualified Binance FZE users “to access the authorised services, including the ability to safely convert virtual assets to fiat with strong Financial Action Task Force-compliant standards”, it said.
UAE residents and global consumers using Binance FZE will benefit from “heightened investor protection and market assurance standards customised for the virtual asset sector”, the company said.
“We are honoured to be the first exchange to be granted an operational MVP licence by Vara – a result of over a year of due diligence, collaboration and demonstration of responsible intent – that now allows us be able to leverage the potential of a progressive regulatory framework, enabling innovation while furthering user protection,” Richard Teng, head of international markets at Binance, said.
An MVP is an early version of a service that can be released to determine market fit and gather feedback. It precedes full market product (FMP) status, according to Vara’s website.
Securing an operational licence is the third and final step in Vara’s MVP process, following the preparatory and provisional stages.
It grants virtual asset service providers permission to conduct activities in seven categories, according to Vara’s website.
Dubai adopted a law to regulate virtual assets to provide investors a safe environment while embracing emerging technologies as interest in them grows.
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 law of its kind in the emirate.
The body aims to create an advanced legal framework to protect investors and provide international standards for virtual asset industry governance to enable responsible business growth.
Dubai’s Vara had issued a preparatory MVP licence to Binance last September, which mandated conditions to be met in order to be authorised for operations.
“The last few years have cemented Dubai as a global virtual asset hub, and we are excited to be a witness to that growth as we build on our operations here,” Alexander Chehade, Binance Dubai’s general manager, said.
It has been a tumultuous 12 months for the global cryptocurrency sector, which is only now emerging from a “crypto winter” after the collapse of a number of large platforms including Celsius, Three Arrows Capital and Sam Bankman-Fried’s FTX, which filed for bankruptcy in the US on November 11.
The collapse of FTX, once valued at $32 billion, is the highest-profile cryptocurrency exchange failure to date, after traders pulled $6 billion from the platform in three days and Binance abandoned a rescue deal, Reuters reported at the time.
Bitcoin was trading at about $29,283 on Sunday afternoon.
In May, Bitcoin climbed above the $30,000 mark for the first time since June 2022, but is still down more than 50 per cent from its record high of more than $68,000 in November 2021.
In February, Binance admitted that it had “gaps” in its compliance with US regulations and said the company was likely to pay a fine to settle investigations.