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Binance is advancing on its plan to become a licensed, approved crypto exchange service in Dubai. The platform managed to obtain a Virtual Aset Regulatory Authority (VARA) license in the region, which is a crucial step to becoming an approved platform.
#Binance FZE, our Dubai based subsidiary, is the world's first exchange to receive the Operational Minimum Viable Product licence in Dubai.
Eligible users can now access regulated virtual asset services, such as fiat on and off ramp services via Binance FZE.
More here 👇
— Binance (@binance) July 31, 2023
Binance receives an MVP license, now seeking FMP
The exchange acquired the operational minimum viable product (MVP) license to gain the ability to offer approved services to Dubai’s traders and investors under the watchful eye of VARA.
According to the exchange, it is allowed to offer broker-dealer and exchange facilities, which are at the disposal of institutional investors.
As for retail users, only certain qualified investors can access it right now. However, there is potential for expansion, which would allow other retail investors to join the platform if Binance manages to gain full approval. For now, this is still only a potential future, but the new license acquisition is a step in the right direction.
Furthermore, VARA-designated standards also allow eligible users to convert crypto to fiat using Binance’s platform.
The exchange’s spokesperson commented on the new development, saying:
In due course investors that qualify (our institutional or qualified retail), through Binance FZE our locally regulated entity, will have access to local currency on and offramp channels, which were not previously available via Binance.com.
Binance managed to secure the provisional MVP license last year in March. Half a year later, in September 2022, the exchange also received the preparatory MVP license.
The operational MVP license allowed the exchange to offer its services to onboarded users. Binance Dubai general manager, Alexander Chehade, said:
With this operational MVP license, all users onboarded through this platform can expect access to a trusted and regulated service that prioritizes security alongside compliance with highly specialized, tier-one virtual asset regulations under VARA.
Binance’s regulatory battles
Obtaining a license from VARA is not an easy task, as its licensing process has four stages. The stages were designed to prove that the platform is regulatory compliant, which it has to be to obtain a full market product license (FMP).
For the moment, Binance does not yet hold the FMP license, which would allow it to offer its services to anyone in Dubai.
Furthermore, the FMP license would also allow it to expand the range of offered services. For the moment, Binance was granted the ability to operate, although under certain restrictions.
Still, with Dubai being one of the fastest-growing crypto economies, it is worth the effort. The region has already attracted over 500 crypto firms to its growing crypto ecosystem, and it is becoming one of the largest crypto hubs in Asia.
Binance is certainly faring better in Asian nations than it is in Europe and the US. In the US, it is facing a lawsuit from the US SEC, alongside Coinbase.
Meanwhile, in Europe, it was forced to withdraw from multiple countries due to regulatory issues. In some countries, it failed to receive permission to operate, and even its registration applications were rejected
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