Dubai’s Virtual Assets Regulatory Authority (VARA) has reportedly asked Binance to share more information about the crypto exchange’s ownership structure and its auditing procedures. According to reports, Dubai regulators are still keen on fostering innovation but without comprising the security of users’ funds.
Binance Asked to Provide More Information
The collapse of the crypto exchange FTX prompted Dubai regulators to ask for more information from crypto license applicants such as Binance, a Bloomberg report has said. According to the April 5 report, officials from Dubai’s Virtual Assets Regulatory Authority (VARA) have in recent weeks told Binance, which already holds the minimal viable product license, to share more information concerning its ownership structure, governance, and auditing procedures.
As previously reported by Bitcoin.com News, no crypto firm including Binance has been granted a full market product (FMP) license. According to VARA, only holders of this license can offer a full spectrum of their services to Dubai residents. On the other hand, Binance and a few other crypto exchanges have been granted the minimal viable product (MVP) license. This license enables the holders to offer their services of an approved range of virtual asset-related services “to suitably qualified retail and institutional investors in Dubai.”
However, following the sudden collapse of Sam Bankman-Fried’s FTX, global regulators including VARA are said to have adopted a stricter stance when dealing with crypto firms. According to unidentified persons quoted in the report, the objective of this new approach is to strike a balance between fostering innovation and protecting users’ funds.
Sam Blatteis, CEO of The MENA Catalysts, suggested that Dubai authorities have taken this approach because they want to maintain good relations with their Western counterparts.
“VARA wants to turn Dubai into a capital for the digital-assets economy while safeguarding its business ties with Western jurisdictions like Europe that are adopting more muscular crypto regulations,” Blatteis reportedly said.
Binance’s Governance Credentials Questioned
Meanwhile, the Bloomberg report suggested that VARA’s stricter approach could spell trouble for Binance CEO Changpeng Zhao (CZ) who already faces legal problems in the U.S. As recently reported by Bitcoin.com News, Zhao is being sued by the Commodity Futures Trading Commission (CFTC) which accuses him and his firm of violating United States derivatives regulations.
Although CZ and Binance have denied the allegations, the lawsuit’s announcement is reported to have caused many users of the exchange to exit the platform. Besides the alleged derivative rules violations, Binance is said to have a complex ownership structure. This structure as well as Binance’s lack of global headquarters have sparked questions about the crypto exchange’s corporate governance credentials.
Such allegations and accusations against the crypto exchange have prompted regulators like VARA to ask for more information about Binance’s ownership structure and board procedures. The report also said other crypto exchange platforms operating in the United Arab Emirates (UAE) have similarly been asked to furnish VARA with more information about their activities.
What are your thoughts on this story? Let us know what you think in the comments section below.