Binance gets ‘full operational licence’ from Dubai virtual asset regulator

Global cryptocurrency exchange Binance has received a full operational licence to conduct its activities in Dubai, in a move expected to hasten the adoption of digital assets and solidify the reliability of the UAE’s regulatory environment.

The virtual asset service provider licence granted by the Virtual Assets Regulatory Authority will allow Binance to extend its current services beyond spot trading and fiat services, and expand its services to retail investors, the company said.

The “full” licence follows the operational minimum viable product licence given to Binance last July, which allowed it to provide exchange and broker-dealer services in Dubai.

The decision will be critical to Binance’s strategy of growing its global user base.

It expects to cross the 200 million user mark “quite shortly”, Richard Teng, chief executive of Binance, told The National. That would cement its status as the world’s biggest crypto exchange by number of users, about double Coinbase’s 108 million, according to Statista.

That would also be about half of the estimated 420 million users with exposure to cryptocurrency assets, according to Binance data.

Crypto.com, which received its Vasp licence last week, says it has more than 80 million users.

Binance has about 188 million users, with about 16 million added in the first quarter, said Mr Teng, who replaced Changpeng Zhao as chief executive in November.

“We’re seeing much greater institutional adoption and institutional money coming into this space … [on] much greater regulatory clarity and a lot more jurisdictions approving [digital asset] products that bring in new investors classes,” he said.

Dubai and the UAE are supporting technology such as digital assets and have launched several initiatives to increase adoption.

In March 2022, the emirate adopted a law to regulate virtual assets to support investors and streamline the offerings from exchanges.

The emirate also set up Vara under the Dubai Virtual Asset Regulation Law, to create a legal framework to protect investors, provide international standards for the virtual asset industry management and enable responsible business growth.

In February last year, Vara also issued regulations as the global cryptocurrency sector was left reeling after the collapse of several platforms, including Celsius, Three Arrows Capital and FTX, led by Sam Bankman-Fried, who was sentenced to 25 years in prison for fraud and conspiracy last month.

The regulations aimed to offer certainty and greater clarity on the expected level of operator responsibility, and also mitigate market risks.