Cryptocurrency exchange Binance is in the crosshairs of the Virtual Assets Regulatory Authority in Dubai. VARA has asked that the CZ-based exchange provide more information about its ownership structure, governance and auditing procedures. According to one analyst, the UAE wants to foster crypto innovation in the country while preserving its commercial ties with the rest of the world.
Not all is clear at Binance, says VARA
Under the leadership of the Virtual Assets Regulation Authority (VARA) Dubai is committed to consolidating its status as a hub for the crypto ecosystem. Nevertheless, VARA is keen to foster innovation without compromising user security. That’s how the virtual asset regulator in Dubai wants to tighten control of crypto platforms operating in the Emirate.
To this end, the Virtual Assets Regulatory Authority (VARA) of Dubai asked Binance to share more information about its ownership structure, governance and auditing procedures. Other exchanges operating in Dubai have been similarly audited, according to Bloomberg.
Binance, which already holds the license Minimal Viable Product (MVP) in Dubai, reacted to this information.
Binance said it has already shared all necessary responses to VARA. The exchange also said it had provided information about the ownership structure and audit process of its local subsidiary. For its part, no VARA officials responded to Bloomberg’s inquiries.
We disclosed all necessary responses to VARA proactively and in accordance with our regulatory and fiduciary responsibilities.Binance
The control of Binance in Dubai comes at a time when this platform is in turmoil in other states.
In the United States, Binance and its CEO Changpeng Zhao are under prosecution legal proceedings. The Commodity Futures Trading Commission (CFTC) accuses them of intentionally violating U.S. laws. The difficult regulatory environment has also led to Binance to suspend trading in pound sterling and in dollars American.
Dubai wants to keep its commercial ties with the West
The United Arab Emirates, of which Dubai is one of the emirates, is known as a space conducive to the crypto industry.
Dubai has in particular set up a regulation clear and complete which is already attracting players in the ecosystem crypto. The decision to strengthen the control of exchanges seems to go against the grain of local commitments. This change is in fact a will of the VARA according to several analysts like Sam Blatteis, CEO of The MENA Catalysts, a center that provides government relations advice to multinational fintech companies in the Persian Gulf.
According to Sam Blatteisthe current approach to the VARA is dictated by the concern to keep the commercial links with the Western countries.
VARA wants to make Dubai a capital for the digital asset economy while preserving its trade ties with Western jurisdictions like Europe that are adopting more muscular regulations.Sam Blatteis, CEO of The MENA Catalysts.
While Dubai is embracing crypto, Europe and the US are implementing very strict regulations. In these regions, crypto companies face significant restrictions, sometimes resulting in the shutdown of their activities. The United Arab Emirates, where Dubai is located, is thus perceived as not doing enough to combat illicit funds. The country is even on the Financial Action Task Force’s grey list. It remains to be seen whether this decision will satisfy the West.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.