Binance Receives Full Crypto License in Dubai after Changpeng Zhao Agrees to Cede Control

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Binance obtained a complete cryptocurrency license from Dubai’s regulatory authorities, granting them a Virtual Asset Provider (VASP) permit in the city. This news was shared by Binance CEO Richard Teng during an interview with Bloomberg on Thursday. According to sources who preferred to remain anonymous, Binance was able to secure this permit following Changpeng Zhao’s decision to relinquish voting control of their Dubai-based entity.

Binance Gets Dubai License from VARA

Binance FZE, the Dubai branch of Binance, obtained an Interim Operational License from Dubai’s Virtual Asset Regulatory Authority (VARA) since last June. This authorization permits Binance to provide brokerage and exchange services, including crypto derivatives trading, prior to receiving a complete Virtual Assets Service Provider (VASP) permit.

VARA made it a condition, in addition to some others, that Zhao relinquish voting rights over Binance FZE. According to the news, this was a prerequisite set by the Dubai regulatory body to guarantee Binance adhered to its US regulatory commitments. One of these obligations reportedly necessitated Zhao stepping down as CEO.

For the past two years, Binance has faced legal challenges from US authorities regarding various suspected misconducts, such as commingling user funds. In June 2023, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance for multiple infringements. The SEC accused Binance of deceiving investors and regulatory bodies, as well as disregarding Know Your Customer (KYC) regulations.

The Commission accused Binance of being aware of the rules but intentionally breaking them for financial gain, potentially endangering customers. Ultimately, Zhao resigned as Binance’s CEO and gave up his role as chairman of Binance.US following federal charge admissions.

Binance FZE’s acquisition of a complete license is a significant achievement for the exchange, particularly in light of past regulatory issues. This milestone aligns with CEO Teng’s commitment to upholding regulatory requirements in various regions. For example, Binance declared its intention to limit access to certain accounts lacking Know Your Customer (KYC) verification. This initiative primarily concerns accounts generated via the Binance Referral Program.

Binance Scrutiny and Headquarters

Additionally, Binance is open to further examination alongside regular regulations, as stated by Catherine Chen, Binance’s Head of VIP and Institutional. During the Paris Blockchain Week, Chen expressed that the $4.3 billion settlement with the SEC marked a significant milestone for the company. This settlement includes five-year monitoring by the US Treasury. In Chen’s opinion, this is a positive development. Binance has already appointed an external compliance monitor to oversee the company’s actions.

Binance is actively seeking a suitable location for its new headquarters, where it will be welcomed by crypto-friendly regulations. At present, the exchange lacks a formal headquarters. During an interview at the Paris Blockchain Week, CEO Teng expressed that choosing a jurisdiction involves careful consideration. He emphasized that corporate governance goes beyond randomly selecting a country. Factors to consider include the regulatory environment that would best accommodate Binance’s range of offerings and the legal frameworks in place for its products.

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2024-04-18 13:51