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Binance has obtained a crucial license from the Virtual Asset Regulatory Authority (VARA) of Dubai, the crypto exchange said on Monday.
By acquiring the operational minimum viable product (MVP) license, Binance has gained the ability to provide approved services in Dubai under VARA oversight.
The services encompass exchange and broker-dealer facilities, initially tailored for institutional and qualified retail investors, with the potential to expand to include other retail investors after obtaining full approval.
Additionally, eligible users in Dubai have the option to convert virtual assets to fiat under VARA-designated standards.
“In due course investors that qualify (our institutional or qualified retail), through Binance FZE our locally regulated entity, will have access to local currency on and offramp channels, which were not previously available via Binance.com,” a spokesperson for the exchange told Blockworks.
The issuance of the license follows Binance’s acquisition of a provisional MVP license in March last year and a preparatory MVP license in September.
“With this operational MVP license, all users onboarded through this platform can expect access to a trusted and regulated service that prioritizes security alongside compliance with highly specialized, tier-one virtual asset regulations under VARA,” Alexander Chehade, Binance Dubai’s general manager, said in a statement.
In Dubai, the VARA has a four-stage licensing process for applicants. They go through these stages to ensure they operate within the regulatory framework before getting a full market product license (FMP).
As of now, Binance has not obtained an FMP license, which would permit them to offer a broader range of authorized services.
The transition from MVP to FMP will enable Binance to onboard retail clients under the 500,000 AED (about $136,000) liquid capital threshold set by VARA during the MVP stage, a spokesperson for Binance said.
Even if they have completed the initial stage of the licensing process, virtual asset service providers may still operate, but with certain restrictions in place.
Dubai is one of the fastest-growing crypto economies, attracting over 500 crypto companies to its digital asset ecosystem as of January.
Although Binance appears to be progressing well with its licensing journey in the Middle Eastern city, it has faced challenges elsewhere.
The exchange was recently forced to withdraw from several European cities due to registration issues and is currently contending with a lawsuit from the US Securities and Exchange Commission.