Dubai's Virtual Assets Regulatory Authority (VARA) reportedly demands information on ownership, governance, and auditing processes from Binance and other global crypto players. This increased scrutiny is part of the regulator's efforts to tighten oversight of cryptocurrency activities in the emirate.
Binance Faces Increased Oversight in Dubai
VARA has requested details from Binance and other global crypto players seeking licenses in Dubai. The regulator also requires Binance to provide similar information at its international group level, which has complicated the process due to the exchange's size and complexity.
Binance Under Pressure from US Regulators
The increased scrutiny in Dubai adds to Binance's regulatory challenges, as it faces further pressure from regulators in the United States. The US Commodity Futures Trading Commission recently filed a lawsuit against Binance and its CEO, alleging improper compliance procedures and trading practices.
Changpeng Zhao Denies Allegations
Binance CEO Changpeng Zhao has rejected the claims against his company, calling them "an incomplete recitation of facts" and asserting that Binance does not trade for profit or manipulate the market.
Binance's MVP License Status in Dubai
In September last year, Binance received a preparatory minimal viable product (MVP) license from VARA. This permit allows the platform to establish an office in the United Arab Emirates and provide digital asset exchange services to pre-qualified investors but not offer locally regulated digital asset services.
Upgrade to Operational MVP License Needed
To provide services to qualified individual and institutional investors, Binance must submit the requirements to VARA to upgrade its license. Only digital asset custodian Hex Trust has obtained an operational MVP license from the Dubai regulator.
VASPs Compliance Deadline Approaching
According to VARA's website, virtual assets service providers (VASPs) already offering their services must comply with the regulator's requirements before the end of June.