The Virtual Assets Regulatory Authority of Dubai has decided to tighten its grip on cryptocurrency providers. The Authority has been regulating the market of cryptocurrency since the year of 2015. It has been issuing guidelines that the crypto regulators are required to comply with.
They have recently asked Binance to disclose its business requirements in Dubai so as to ensure compliance with the legal norms. This move will allow the authority to take note of all malpractices within the domain of the country. According to the Authority, there is a need to know more about the background of the cryptocurrency providers in order to develop a competitive market for virtual assets in Dubai.
The Virtual Assets Regulatory Authority of Dubai has issued guidelines for Binance
This latest notification is in line with Dubai’s objective to develop a global market for the exchange of virtual assets. Binance would be required to submit the essential documents to prove its ownership and compliance with government norms.
Binance is already facing a tough time as it is defending itself in a lawsuit filed by American Authorities. They have accused binance of undertaking unethical and illegal activities thereby leading to speculation in the prices of the virtual assets
The Authority issued a minimal viable product licence to Binance last September. According to the terms and conditions of this licence, Binance has the right to establish an office in the United Arab Emirates. Binance can also offer digital asset exchange services to pre-qualified institutional investors.
However, this licence is preparatory in nature and Binance has already applied to the Authority for the issuance of an operational licence. An operational licence would permit the largest cryptocurrency exchange provider to offer its services to qualified buyers to both institutional and individual investors. In fact, with this licence, the exchange provider could enjoy complete market access.
However, it isn’t easy for Binance to upgrade its licence because the Authority has decided to exercise stringent control. The Virtual Assets regulatory authority has mandated all these exchange providers to comply with additional requirements by the end of June 2023. According to these latest requirements, Binance would be required to submit additional documents with respect to its ownership, governance, and auditing process.
In addition, Binance will have to now report to the Authority with its global expansion plans and the organization of the board of trustees. The Authority aims to cover other cryptocurrency institutions under this rule as well. Therefore, the global firms which are planning to set their footprint in Dubai will have to face the burden of compliance.
All of this has added to the existing burden on Binance. The crypto exchange provider is in troubled waters for the time being. The exchange provider is already fighting a lawsuit in the United States of America. The American authorities have held Binance liable for undertaking unauthorized and manipulative transactions in virtual assets. In addition, various other countries have asked Binance to comply with certain regulatory norms.
This compliance is likely to increase the basic costs for the exchange provider. Zhao, who is the Chief Executive Officer of Binance has defended the exchange provider by stating that the company has always respected the laws of the land and has never encouraged any kind of speculation in the trade of virtual assets. The investors who trade on this platform have never minted any unaccounted profit. Therefore, according to him all of these allegations are misplaced and unwarranted.
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The investors have been strictly advised against indulging in any unauthorized trade through Binance. The Authority has also commenced a detailed investigation to scrutinize all the evidence on record. The Government of Dubai aims to develop Dubai as a global hub.
It has developed a comprehensive mechanism to regulate the trade of virtual assets so as to boost the economy of the country. The Crown Prince of Dubai while attending the meeting of the Board of Trustees of the Dubai Future Foundation expressed them to build the market for virtual assets and explore futuristic opportunities in this segment for the growth of the country as a whole.
According to the initiatives taken by the Dubai Government, it is the most future-ready city in the world. The latest move to regulate the crypto exchange platforms will help to induce transparency and accountability.
It will reduce the possibility of laundering black money. Therefore, the authorities have already decided to enforce strict measures against all of these illegal practices for raising Dubai at par with international regulatory measures.