- Dubai’s Virtual Assets Regulatory Authority (VARA) has asked Binance for additional information regarding its ownership structure, governance, and auditing processes.
- The increased scrutiny on virtual assets service providers in Dubai adds to Binance’s regulatory challenges as it faces pressure from regulators in the United States.
The Virtual Assets Regulatory Authority (VARA), which oversees crypto activities in Dubai, is increasing its regulatory guardrails by requesting more information from Binance about its business requirements, according to a Bloomberg report.
Increased Regulatory Scrutiny in Dubai
Citing three anonymous sources, the report indicates that VARA has asked Binance to submit additional details about the exchange’s ownership structure, governance, and auditing processes. This request is in line with similar demands made of other global crypto players seeking licenses in Dubai. VARA officials have also required Binance to provide information regarding board procedures at its global group level, with queries taking longer to address due to the exchange’s size and complexity.
Binance’s Ongoing Regulatory Challenges
The heightened scrutiny on virtual assets service providers (VASPs) in Dubai adds to Binance’s woes as it faces increasing pressure from regulators in the United States. Binance received a preparatory minimal viable product (MVP) license from VARA in September last year, allowing the platform to establish an office in the United Arab Emirates and offer digital asset exchange services to pre-qualified investors. However, Binance is currently unable to provide locally regulated digital asset services in the emirates.
Securing an Operational MVP License
To upgrade to an operational MVP license, Binance must submit the necessary requirements to VARA, which would then permit it to offer services to qualified individual and institutional investors before obtaining a full market product permit. At present, only digital asset custodian Hex Trust has secured an operational MVP license from the Dubai regulator. According to VARA’s website, VASPs already providing their services must comply with the regulator’s requirements before the end of June.
Conclusion :
As Dubai’s VARA increases regulatory scrutiny on Binance and other virtual asset service providers, the crypto industry faces growing challenges to comply with tightening global regulations. Binance, in particular, must meet the additional requirements to secure an operational MVP license and continue expanding its services in the region.
Suggested Reading:
- Why is Dubai an Attractive Crypto Oasis?
- Dubai Financial Watchdog Set To Unveil New Regulatory Framework
