Binance, one of the largest cryptocurrency exchanges in the world, has achieved another significant milestone in its relationship with regulators in the United Arab Emirates (UAE). The exchange’s subsidiary based in Dubai, Binance FZE, has recently received an operational minimum viable product (MVP) license from Dubai’s Virtual Asset Regulatory Authority (VARA). This license authorizes Binance to provide cryptocurrency exchange and virtual asset broker-dealer services in Dubai.
Initially, these services will be limited to institutional and qualified retail investors in the region. Eligible investors can now access authorized services such as compliant crypto-to-fiat exchanges under the oversight of the intergovernmental Financial Action Task Force (FATF). To become a user of Binance in Dubai, investors need to have a “qualified retail client” status, which entails being at least 21 years old and possessing a net liquid asset of at least 500,000 United Arab Emirates dirhams ($136,000). Documentary proof such as bank statements and proof of funds will be required to validate these financial requirements. Additionally, investors must provide valid identification documents, including passports and visas, along with proof of a valid UAE address and contact details.
According to a spokesperson for Binance, the Dubai entity of the exchange is now able to offer a range of services, including crypto-to-fiat exchange and conversions, transfer and custody, brokerage, and virtual asset payments and remittance services. This expanded scope of services demonstrates Binance’s commitment to meeting the diverse needs of its customers in Dubai.
This recent regulatory achievement follows Binance’s earlier progress with VARA. In March 2022, the exchange received a provisional MVP license, which was followed by a preparatory MVP license in September 2022. The final operational MVP license obtained in Dubai solidifies Binance’s presence in the region and allows the exchange to provide its services in compliance with local regulations.
The regulatory landscape for cryptocurrency exchanges in Dubai has been evolving, with VARA recently requesting more information from Binance regarding its business requirements. The exchange promptly provided all the requested information, emphasizing its commitment to cooperating with VARA during the licensing process.
Although some previous reports have suggested that MVP licenses offer limited capabilities, Binance’s current license enables it to service a wide range of investors, including accredited and qualified retail clients. Bybit CEO Ben Zhou has highlighted the limited scope of MVP licenses, stating that they only allow exchanges to serve a “very restricted set of accredited investors.” Binance’s operational MVP license, however, allows the exchange to cater to a larger segment of the market, including qualified retail investors.
This achievement for Binance comes at a time when regulatory scrutiny in the crypto industry is increasing. VARA recently suspended the operational license of another crypto exchange, BitOasis, for failing to meet mandated conditions within the required timeframes. BitOasis has since been working with VARA to fulfill the remaining conditions.
Regarding compliance conditions, Binance’s spokesperson explained that VARA’s framework includes mandatory rulebooks related to general operations, compliance, and market conduct requirements. These regulations were published by VARA in 2023, setting the groundwork for ensuring a secure and transparent crypto industry in Dubai.
With Binance’s new operational MVP license, the exchange is well-positioned to further establish itself as a leading player in the UAE’s cryptocurrency market. This regulatory milestone demonstrates Binance’s commitment to working closely with regulators and providing compliant and trusted services to its customers.