7 months ago
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Binance FZE, the global exchange’s Dubai arm, can now fully operate in the city after authorities awarded the company a full license.
Binance has finally been granted a full crypto license from authorities in Dubai, securing a Virtual Asset Provider (VASP) permit in the city. Binance Chief Executive Officer (CEO) Richard Teng disclosed the development in a Thursday Bloomberg interview. According to unnamed people familiar with the development, Binance only received the VASP permit after co-founder and former CEO Changpeng Zhao agreed to cede voting control of the Dubai entity.
Binance Gets Dubai License from VARA
Dubai’s Virtual Asset Regulatory Authority (VARA) gave Binance FZE, the Dubai arm, an MVP Operational license since June last year. The license allows Binance to offer broker-dealer and exchange services, including crypto derivatives trading. The MVP Operational license is an interim greenlight granted before a full VASP permit.
In addition to a few requirements, VARA asked Zhao to give up voting control of Binance FZE as one of the final conditions. According to reports, the Dubai authority wanted to ensure that Binance maintained its agreement with US authorities, part of which required Zhao to cede his CEO position.
Over the last two years, Binance has been in a legal battle with US authorities over several alleged misconducts, including commingling user funds. Last June, the United States Securities and Exchange Commission (SEC) sued Binance for several violations, accusing the major exchange of misleading investors and regulators and flouting KYC rules.
The Commission alleged that Binance knew the rules but deliberately chose to circumvent them for profits and put customers at risk. Eventually, Zhao had to step down as CEO of the exchange after pleading guilty to federal charges. The Binance co-founder also relinquished his position as Binance.US chairman.
The full license Binance FZE has now received is a feather in the exchange’s hat, mainly because of the regulatory problems. It also supports CEO Teng’s promise to ensure that the exchange achieves regulatory compliance with authorities in several jurisdictions. For instance, Binance announced it would begin restricting accounts without KYC verification. This effort largely relates to accounts created under the Binance Link Program.
Binance Scrutiny and Headquarters
Furthermore, Binance is ready to welcome scrutiny in addition to general regulations, according to Catherine Chen, the Head of VIP and Institutional at the exchange. At the Paris Blockchain Week, Chen said the $4.3 billion settlement it agreed to with the SEC was a major turning point for the company. The agreement also requires Binance to submit to US Treasury monitoring for five years. According to Chen, this is a “great thing.” The exchange has already employed an independent compliance monitor to keep the company in check.
Binance is currently searching for crypto-friendly jurisdictions to situate its headquarters. The exchange, which presently has no formal headquarters, is now looking for a home, according to CEO Teng. Speaking during a discussion at the Paris Blockchain Week, Teng explained that the decision requires some consideration. According to him, corporate governance requires more than simply picking a country at random. He explained that there are a “multitude of factors that you have to weigh and assess.” Some of these include the value of Binance’s suite of products and what jurisdictions have laws that can cater to this suite.
