Binance, the largest cryptocurrency exchange globally, has finally obtained a regulatory license in Dubai, marking a significant milestone for the platform. According to sources familiar with the matter, Binance secured a virtual asset service provider (VASP) license after its co-founder Changpeng Zhao relinquished his voting rights in the exchange’s local entity, Binance FZE, based in Dubai.
The final step in securing the VASP license from the Virtual Assets Regulatory Authority (VARA) was Zhao's forfeiture of his voting rights within the Dubai-based Binance FZE, as disclosed by insiders who preferred to remain anonymous. Binance CEO Richard Teng confirmed the license acquisition but dismissed speculation regarding Zhao's role, emphasizing that the exchange refrains from commenting on media speculation and maintains confidentiality in dealings with regulators.
The regulatory clearance represents a significant triumph for Binance, which has faced intensified scrutiny following regulatory challenges such as the FTX controversy. In November 2023, Binance agreed to a $4.3 billion settlement with U.S. authorities for violating the Bank Secrecy Act, leading to co-founder Zhao's resignation as part of a plea deal. Zhao is scheduled for sentencing on April 30, facing a potential 18-month prison term.
Dubai's VARA authorities have been cautious not to interfere with Binance's settlement with U.S. regulators, leading to the stipulation for Zhao to relinquish his voting rights in Dubai FZE. Despite this, Zhao remains the ultimate beneficial owner of Binance FZE's parent company in Abu Dhabi. Following Zhao's divestiture of voting control, VARA rigorously reviewed the exchange's planned offerings in Dubai.
Alex Chehade, Binance Dubai's general manager, highlighted the importance of obtaining a formal license in the UAE for Binance's future operations. He noted the UAE's commitment to transitioning toward Web3 and diversifying away from fossil fuels, with cryptocurrencies viewed as a pivotal enabler of this shift. Binance had previously received VARA's Preparatory Minimum Viable Product License in September 2022, enabling it to provide digital asset services to qualified investors.
