Binance, the world’s largest cryptocurrency exchange, has finally obtained a regulatory license in Dubai. According to sources familiar with the matter, Binance received its Virtual Asset Service Provider (VASP) license after its co-founder, Changpeng Zhao, relinquished his voting power in the exchange’s Dubai-based unit, Binance FZE. The Virtual Assets Regulatory Authority (VARA) required Zhao to give up his voting power in order to grant the VASP license. Binance’s current CEO, Richard Teng, confirmed the receipt of the license but dismissed claims about Zhao giving up his voting power as mere speculation.
This regulatory license is a major victory for Binance, as it has faced regulatory scrutiny following the collapse of FTX. In November 2023, Binance agreed to pay a $4.3 billion settlement to US authorities for violating the Bank Secrecy Act due to a lack of Anti-Money Laundering (AML) protocols. Co-founder Zhao pleaded guilty to failing to maintain adequate AML protocols and resigned as part of the plea deal. He is scheduled to be sentenced on April 30 and could face up to 18 months in prison.
The decision to require Zhao to give up his voting power in Binance’s Dubai unit was made by VARA officials to avoid interfering with the recent settlement between Binance and US authorities. This was the primary reason behind VARA’s requirement. After Zhao relinquished his voting control, VARA conducted a thorough examination of the exchange’s planned products and services in Dubai. Despite losing his voting rights, Zhao remains the ultimate beneficial owner of Binance FZE’s parent company based in Abu Dhabi.
Obtaining a full license in the United Arab Emirates has been a key focus for Binance’s future operations. According to Alex Chehade, the general manager of Binance Dubai, the exchange received a preparatory minimal viable product license from VARA in September 2022, which allowed them to offer digital asset services to qualified retail and institutional investors.
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