Binance Obtains VASP License in Dubai Amid Regulatory Scrutiny

Binance, the world’s largest cryptocurrency exchange, has made a significant move in the regulatory landscape by obtaining a Virtual Asset Service Provider (VASP) license in Dubai. This development comes after intense scrutiny of the crypto industry and a $4.3 billion settlement with U.S. authorities over Anti-Money Laundering violations.

The license was granted after Binance co-founder Changpeng Zhao relinquished his voting power in the exchange’s Dubai-based unit, Binance FZE, as required by the Virtual Assets Regulatory Authority (VARA). While Binance’s current CEO, Richard Teng, confirmed the license acquisition, he dismissed claims about Zhao’s voting power as “pure speculation.”

Zhao, who pleaded guilty to failing to maintain adequate AML protocols, resigned from his CEO role as part of a plea deal, with his sentencing scheduled for April 30. Despite stepping back from direct managerial roles, he remains the ultimate beneficial owner of Binance FZE’s parent company based in Abu Dhabi.

The granting of the VASP license aligns with the United Arab Emirates’ goal to position itself as a hub for Web3 and digital assets, as part of its economic diversification away from fossil fuels. The new regulations aim to protect investors and establish international standards for industry governance, with the VARA now having enforcement powers in Dubai’s special development and free zones.

The regulations set out specific rulebooks that VASPs must comply with, including guidelines for compliance, risk management, market conduct, and other requirements. This license is a crucial step for Binance as it navigates global regulatory challenges and positions itself as a key player in the evolving crypto landscape.