Dubai Welcomes VASP-Licensed Crypto Exchange Powered By Web3 Wallet

The Dubai Virtual Assets Regulatory Authority (VARA) has awarded an exclusive Virtual Asset Service Provider (VASP) license to the crypto wallet firm Backpack, resulting in the launch of Backpack Exchange.

Backpack’s VARA license is exclusive to the provision of crypto exchange services within Dubai, and it does not authorize the company to offer any other virtual asset products or services. The announcement highlights that Backpack Exchange integrates advanced technologies such as zero-knowledge (ZK) proof-of-reserves, multi-party computation (MPC) for custody, and high-speed order execution, among other exceptional features.

Additionally, the announcement discloses that Backpack Exchange has secured operational licenses in various jurisdictions worldwide during the past five months.

The flagship product, Backpack Wallet, currently operates without regulatory oversight. Nonetheless, its purpose is to facilitate users in transitioning from fiat to on-chain applications in the coming times. Backpack CEO and co-founder Armani Ferrante expressed his commitment to bringing transparency to cryptocurrency exchanges.

Backpack Exchange: Revolutionizing Crypto Trust With zk-Proofs & MPC

Challenging the conventional approach of operating all-inclusive cryptocurrency exchanges susceptible to single points of failure, lacking proof-of-reserves, or auditability, Ferrante remarked, ‘By employing cryptographic techniques such as zk-proofs, MPC, and state machine replication, Backpack Exchange aims to elevate standards of transparency and compliance, showcasing the true potential of this technology. The motto is simple: Don’t rely on trust alone; verify.’

Starting in November 2023, current users of both Backpack and Mad Lads will enjoy early access to Backpack Exchange, with a public release scheduled for Q1 2024. In the interim, Backpack intends to expand its service portfolio by incorporating various trading features, including derivatives, margin trading, and cross-collateral options.

Over the past year, the Dubai VARA regulator has granted a range of operational licenses to multiple cryptocurrency exchanges, solidifying its reputation as a crypto-friendly jurisdiction.

In Feb 2023, the regulatory body introduced updated directives for Virtual Asset Service Providers (VASPs) operating within the emirate. However, these guidelines mandate compliance with marketing, advertising, and promotional regulations for all cryptocurrency exchanges. Non-compliance may result in fines ranging from 20,000 UAE dirhams ($5,500) to 200,000 dirhams ($55,000), with repeat violations carrying penalties as high as 500,000 dirhams ($135,000).

Related Reading | Meme Coin Mania Continues, but Shiba Inu (SHIB) Burn Tapers Off: What’s the Deal?

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

Comments (No)

Leave a Reply