Dubai’s crypto watchdog, the Virtual Assets Regulatory Authority (VARA), is cracking down on international digital asset companies seeking licenses after a series of collapses in the sector last year. VARA is reportedly requesting more information from Binance and other license seekers, such as the ownership structure, auditing procedures, governance, etc.
Dubai’s Digital Asset Regulator Asks Crypto License Seekers for More Information
Dubai is demanding more information from the crypto license applicants such as Binance due to the unprecedented collapse of crypto exchange FTX in 2022, according to Bloomberg, citing people with knowledge of the matter.
As per the report, Dubai’s crypto regulator VARA asked Binance to deliver additional information regarding its ownership structure, auditing process, and governance. The regulator demands similar information from all other international companies seeking licenses in the most populated emirate.
The move comes after VARA revealed a series of regulatory requirements for crypto firms planning to offer services in Dubai earlier this year. One of the requirements is a license issued by VARA, along with a set of regulations for issuing all digital assets and digital asset marketing services.
The increased scrutiny also marks another effort by Dubai authorities to regulate the digital assets market as part of its plan to become a regional fintech and crypto hub. One of the critical steps toward achieving this was the establishment of VARA in 2022, which seeks to regulate all digital asset activities in the UAE.
Binance Continues to Attract Regulators’ Attention
Last month, the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its CEO Changpeng Zhao, citing a violation of derivatives regulations. Other US regulators, including the SEC, have Binance in their crosshairs, which could also be one of the reasons why Dubai is demanding more information from the world’s biggest exchange.
“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.”
– Sam Blatteis, CEO of The MENA Catalysts
Last week, the FT reported that Binance has been concealing its links to China for several years, despite the crypto exchange’s claims that it had left the country in 2017. Binance saw over $2 billion in outflows late last month amid mounting regulatory issues.
This article originally appeared on The Tokenist
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