Dubai’s Crypto Approval: Binance Secures License Amid CZ’s Exit

Binance, the world’s largest cryptocurrency exchange, secured a long-awaited regulatory license in Dubai.

Binance CEO Richard Teng told Bloomberg on April 18 that the exchange received its Virtual Asset Service Provider (VASP) license after co-founder Changpeng Zhao relinquished his voting power in the exchange’s local entity.

The Virtual Assets Regulatory Authority (VARA) required Zhao to surrender his voting rights for the final approval of the Virtual Asset Service Provider (VASP) license, according to sources familiar with the matter. This regulatory milestone marks a significant achievement for Binance, amidst ongoing scrutiny following the FTX collapse.

In Nov 2023, Binance agreed to a $4.3-billion settlement with United States authorities, resolving federal charges related to deficiencies in Anti-Money Laundering (AML) protocols, which violated the Bank Secrecy Act.

Binance co-founder Zhao has admitted guilt to one felony charge, specifically for inadequate AML protocols, and stepped down as part of the plea agreement. His sentencing is scheduled for April 30, with a potential maximum sentence of 18 months behind bars.

Binance Strategic Shift: Compliance & Expansion In The UAE

Moreover, Dubai’s VARA officials aimed to avoid disruption to Binance’s recent settlement with U.S. authorities, prompting Zhao’s resignation as CEO.

This led VARA to request Zhao to relinquish his voting powers in Dubai FZE. Following this, VARA closely scrutinized the exchange’s planned offerings in Dubai, as per sources.

Even with diminishing voting rights, Zhao retains ownership of Binance FZE’s parent company, headquartered in Abu Dhabi.

Binance Dubai’s general manager, Alex Chehade, emphasized that obtaining a full license in the United Arab Emirates is a key priority for Binance’s upcoming endeavors.

He highlighted the UAE’s senior leadership’s ambition to position the region as a hub for Web3, aiming to shift focus from fossil fuels and leverage cryptocurrency as a catalyst for diversification.

In Sept 2022, Binance obtained a preliminary minimal viable product license from VARA, empowering the exchange to provide various digital asset services tailored for both retail and institutional investors who meet the requirements.

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