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.