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The crypto entity of Dubai of Nexo, Nexo Services FZE, has announced that it has obtained the first approval from the Dubai Virtual Asset Regulatory Authority (VARA).
The company will be able to offer a wide range of virtual asset services such as Loan and Broker-Dealer, in a regulated manner in the country.
Summary
Nexo: the crypto company obtains the first approval from the VARA of Dubai to offer its services
Nexo Services FZE, the Dubai entity of Nexo, has obtained the first approval from VARA – Virtual Asset Regulatory Authority of Dubai, to offer its services.
Nexo’s Dubai entity, Nexo DWTC, has been awarded an Initial Approval from Dubai’s Virtual Assets Regulatory Authority (VARA) for a vast range of virtual asset service activities. 🇦🇪
— Nexo (@Nexo) March 5, 2024
Dubai’s forward-looking culture of innovation is a natural fit for our goal in contributing to… pic.twitter.com/H5dPjzXru2
“Nexo DWTC, the Dubai entity of Nexo, has obtained initial approval from the Virtual Assets Regulatory Authority (VARA) of Dubai for a wide range of virtual asset services activities. Dubai’s forward-thinking culture of innovation naturally aligns with our goal of contributing to the regional ecosystem in a compliant manner.”
Basically, it is an Initial Approval (or IA) that allows Nexo to offer activities such as Loan and Virtual Asset Loan, Management and Investment, and Broker-Dealer.
At the moment, Nexo has not yet obtained the license but is on the right track. In fact, once Nexo has the license, it will be able to make its platform compliant with local regulations, accessible both via mobile and web.
Nexo and Dubai: crypto loan solutions and more regulated by VARA
Kalin Metodiev, CFA, co-founder and Managing Partner of Nexo, wanted to comment on the news as follows:
“From the United Arab Emirates, a global leader in vision, governance, and innovation, Nexo aims to contribute to the regional ecosystem through pioneering solutions in lending, intermediation, management, and investment. Nexo is excited to pursue new market strategies aligned with the transformative guidance of the Dubai Virtual Asset Regulatory Authority”
Nexo, with its 7 million users, sees the Dubai market as fundamental and emphasizes its commitment to regional growth through premium services.
On the other hand, Dubai is trying to create a culture of innovation with forward-thinking regulations, especially in the finance and entrepreneurship sector. In this way, the country is attracting the best financiers, technology pioneers, and visionary companies.
Not only by launching one of the first blockchain strategies in 2016 and establishing the VARA in 2022, Dubai consolidates its role as a global center for digital asset innovation, reflecting its impact in the traditional financial sector.
The $45 million fine imposed on the SEC in the USA
Nexo’s embrace of Dubai’s politics comes just one year after the crypto company accepted to pay 45 million dollars in fines to the Securities and Exchange Commission (SEC) of the USA.
Basically, Nexo had been sued in eight American states for alleged sale of unregistered securities, related to the Earn Interest Product (EIP).
This EIP promised high returns and did not appear to be registered as an investment contract as required by state law.
That’s why Nexo gave in to payment, ceasing the unregistered offer of crypto loan products.
The crypto company stated that the payment of the fine reflects a historic resolution agreement with the SEC, thus closing all the years-long investigations on the company.
Apparently , Nexo has not been involved in fraud or deceptive business practices, but has only violated a purely bureaucratic rule to protect investors.