Kris Marszalek, chief executive of Crypto.com, said Dubai continues to be a leading market for designing effective regulation for the crypto space. Bloomberg
Kris Marszalek, chief executive of Crypto.com, said Dubai continues to be a leading market for designing effective regulation for the crypto space. Bloomberg
Kris Marszalek, chief executive of Crypto.com, said Dubai continues to be a leading market for designing effective regulation for the crypto space. Bloomberg
Kris Marszalek, chief executive of Crypto.com, said Dubai continues to be a leading market for designing effective regulation for the crypto space. Bloomberg

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Crypto.com secures virtual assets licence from Dubai regulator

The licence will allow the company to offer exchange services to retail and institutional users

Deepthi Nair
Deepthi Nair

November 14, 2023

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Cro Dax Middle East, the Dubai-based subsidiary of cryptocurrency exchange Crypto.com, has secured a licence to offer specified virtual asset service activities from the emirate’s Virtual Assets Regulatory Authority.

The virtual assets service provider licence is subject to the company satisfying certain conditions and localisation requirements defined by Vara and will be able to commence operations subject to an operational approval notice from the regulator, it said on Tuesday.

Following operational approval, the Vasp licence will allow Singapore-based Crypto.com to “offer regulated virtual asset service activities, including exchange services, broker-dealer services, management and investment services, and lending and borrowing services”, it added.

The services will be available to retail and institutional users through its app and exchange platform.

“Dubai continues to show it is a leading market when designing effective regulation for the crypto space while still supporting adoption and innovation,” said Kris Marszalek, chief executive of Crypto.com.

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.

In February, Vara issued regulations to offer certainty and greater clarity on the expected level of operator responsibility, and also mitigate market risks.

It has been a tumultuous 18 months for the global cryptocurrency sector after the collapse of a number of large platforms, including Celsius, Three Arrows Capital and Sam Bankman-Fried’s FTX.

The collapse of FTX, once valued at $32 billion, is the highest-profile cryptocurrency exchange failure to date.

On November 2, Bankman-Fried was found guilty of defrauding customers of his cryptocurrency exchange in one of the biggest financial frauds on record in the US.

Bitcoin was trading at about $36,471 on Tuesday morning.

Crypto.com is “working diligently” to become one of the first virtual asset exchanges to implement its Vasp licence following Vara’s issuance of its specialised regulations for virtual assets in February, the company said.

The company received its minimum viable product provisional licence in June 2022 and MVP preparatory licence in March this year.

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.

In March 2022, Crypto.com said Dubai was its regional hub for the Middle East and Africa.

Four reasons global stock markets are falling right now

There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:

1. Rising US interest rates

The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.

Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”

At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.

2. Stronger dollar

High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.” 

3. Global trade war

Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”

4. Eurozone uncertainty

Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.

Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”

The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”

On Women's Day
Updated: November 14, 2023, 4:48 AM
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