Binance Secures VASP License in Dubai Amid Regulatory Challenges
Binance, the world’s largest cryptocurrency exchange, has achieved a significant milestone by securing a Virtual Asset Service Provider (VASP) license in Dubai. This regulatory achievement comes after co-founder Changpeng Zhao made a pivotal decision to relinquish his voting rights in the local Binance entity, paving the way for the license approval.
In a strategic move to comply with regulatory requirements, Zhao gave up his voting power in Binance FZE, the Dubai-based unit of the exchange. This decision was crucial in meeting the final stipulation set by Dubai’s Virtual Assets Regulatory Authority (VARA) for the issuance of the VASP license.
Richard Teng, CEO of Binance, emphasized the importance of this step in aligning with international regulatory standards, especially in light of increased scrutiny following the collapse of FTX. The license acquisition in Dubai comes at a critical time for Binance, as the exchange has recently faced significant regulatory challenges.
In November 2023, Binance agreed to a $4.3 billion settlement with U.S. authorities to resolve charges of violating Anti-Money Laundering norms and the Bank Secrecy Act. As part of this settlement, Zhao pleaded guilty to failing to maintain adequate AML protocols and resigned, with his sentencing scheduled for the end of April.
The decision to remove Zhao from a voting role in the Dubai unit underscores Binance’s commitment to compliance and governance reform. VARA’s insistence on this change demonstrates the authority’s dedication to ensuring that Binance’s operations align with its recent legal resolutions in the U.S.
Despite stepping down from direct governance, Zhao remains the ultimate beneficial owner of the parent company based in Abu Dhabi, maintaining his influential presence within the organization. The acquisition of the crypto license in Dubai marks a significant milestone for Binance and highlights the exchange’s efforts to navigate regulatory challenges and enhance its compliance measures.
