FTX Exchange Gets a VAX License to Operate in Dubai’s Crypto Market
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FTX, one of the largest cryptocurrency exchange platforms globally, is expanding its business in the United Arab Emirates. The exchange has announced receiving a license to operate as a virtual asset exchange service provider in Dubai.
FTX receives an operating license in Dubai
The license was issued under a cryptocurrency law adopted in Dubai last week. Under this law, the Dubai Virtual Asset Regulatory Authority (VARA) will become the leading regulator in the country, and it will oversee the free zones and special development sectors.
Through the VAX license, FTX will have the regulatory clearance to operate under the cryptocurrency market model in Dubai. The crypto market model will comply with the international standards created by global regulatory bodies, including the Financial Action Task Force (FATF).
The founder and CEO of FTX, Sam Bankman-Fried, has stated that this will be the “first and so far only” license granted to a cryptocurrency exchange firm operating in Dubai. The executive also added that FTX was pleased to receive this license to operate in Dubai.
Besides obtaining this license, FTX is also planning to establish a regional headquarter in Dubai. It will also provide cryptocurrency derivatives products targeting institutional investors. “FTX is proud to be the first licensee under Dubai’s prudential supervision regime,” Bankman-Fried added.
The UAE is not the only market that FTX is exploring. The exchange also has a presence in Europe. Before obtaining this license, FTX used to serve the European and Middle Eastern divisions through FTX Europe. The Dubai World Trade Centre has become quite popular with cryptocurrencies, and it already has a regulatory framework to support digital assets.
The head of FTX Europe, Patrick Gruhn, commented on this development saying,
The certainty and credibility that Dubai assures in its adherence to these commitments allow FTX to safety pursue its overall strategy of scaling towards becoming the first virtual-asset service provider to enter global markets in a fully regulated manner.
The UAE has emerged as one of the most crypto-friendly regions globally. The UAE capital, Dubai, has been leading in attracting crypto business into the UAE. The country is still developing a comprehensive crypto regulatory framework, but this has not deterred crypto businesses from emerging in the region.
Last year, the Dubai free economic zones emerged as friendly hubs for cryptocurrency trading activities. Cryptocurrency activities in the free zones were promoted by UAE regulators that came together to support crypto-related businesses operating in the region.
Binance seeks an operating license in Dubai
Binance, the largest cryptocurrency exchange platform globally by trading volumes, is also looking to set up its global headquarters in Dubai. Before this, Binance used to operate on a fully decentralized structure, but the growing regulatory scrutiny has created an urgency for creating a centralized framework with a physical headquarter.
Binance has its roots in China. The UAE is a strategic location for Binance to venture into the Middle East. The UAE is the third-largest crypto market in the Middle Eastern region. The leading countries by crypto trading volumes are Turkey and Lebanon.
Despite Binance being behind FTX in obtaining a license to operate in Dubai, the exchange has recently received regulatory approval in Bahrain. This will allow the exchange to access the Middle East and North Africa (MENA) region.
The CEO of Bahrain Economic Development Board, Khalid Humaidan, commented on this development, saying, “Team Bahrain has built a world-class infrastructure to support the fast-growing blockchain and crypto industry, with robust regulations… Collaboration with industry leaders such as Binance will further enhance our mission to establish the Kingdom of Bahrain as a leading business hub.”