Dubai’s Virtual Assets Regulatory Authority (VARA) has reportedly asked Binance to share detailed information about the crypto exchange’s ownership structure and auditing procedures. According to reports, Dubai regulators are keen to promote innovation, but without comprising the security of users’ funds.
Binance requested to provide further information
The collapse of crypto exchange FTX has prompted Dubai regulators to ask for more information from crypto license applicants such as Binance, according to a Bloomberg reporton April 5According to the April 5report, officials at Dubai’s Virtual Assets Regulatory Authority (VARA) have been working for the past few weeks asking Binance, which already has a minimum viable product license, to share more information about its ownership structure, governance, and auditing procedures.
As Bitcoin.com News previously reported, crypto companies, including Binance, are not granted a Full Market Product (FMP) license; according to VARA, only holders of this license can offer the full spectrum of services to Dubai residents The company is not a FMP licensee. Binance and several other crypto exchanges, on the other hand, are granted a Minimum viable product (MVP) license. This license allows the holder to provide an approved range of virtual asset-related services “to suitably qualified individuals and institutional investors in Dubai.”
However, following the sudden collapse of Sam Bankman-Fried’s FTX, regulators worldwide, including VARA, have reportedly adopted a tougher stance when dealing with crypto companies. According to an unidentified person quoted in the report, the goal of this new approach is to strike a balance between fostering innovation and protecting users’ money.
Sam Blatteis, CEO of The MENA Catalysts, noted that the Dubai authorities took this approach because they want to maintain good relations with Western countries.
“VARA wants to make Dubai the capital of the digital asset economy while protecting its business relationships with Western jurisdictions like Europe, which has adopted more muscular crypto regulations,” Blatteis reportedly said.
The credibility of Binance’s governance is being questioned
As Bitcoin.com News recently reported, Zhao is being sued by the Commodity Futures Trading Commission (CFTC), alleging that he and his firm are in violation of U.S. derivatives regulations.
CZ and Binance have denied the allegations, but the announcement of the lawsuit has reportedly caused many users of the exchange to exit the platform. Besides the alleged violations of derivatives rules, Binance is said to have a complex ownership structure. This structure, as well as the fact that Binance does not have a global headquarters, has raised questions about the credibility of the crypto exchange’s corporate governance.
These allegations and accusations against the crypto exchange have prompted regulators like VARA to seek more information about Binance’s ownership structure and board procedures. Other crypto exchange platforms operating in the United Arab Emirates (UAE) have also reportedly been asked to provide VARA with more information about their activities as well.
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