Simon Ng The Virtual Assets Regulatory Authority (VARA) in Dubai has asked Binance, a crypto exchange platform, to provide more information about who owns the company and how it ensures its customers’ money is safe. Dubai still wants to be innovative, but they want to make sure their users are not at risk.
Dubai Tightens Regulations in Response To FTX Collapse
Recently, the collapse of a crypto exchange called FTX caused Dubai regulators to ask Binance (a company with a virtual assets license) for more details. This includes information about its owner, rules, and auditing procedures.
According to news from CryptokenTop, none of the crypto firms including Binance have been given the full market product (FMP) license. VARA says that only holders of this license can give customers in Dubai all their services. On the other hand, companies like Binance and others were granted a minimal viable product (MVP) license. This lets them provide approved range of virtual asset-related services to either qualified retail or institutional investors living in Dubai.
Recently, after Sam Bankman-Fried’s FTX experienced a sudden collapse, global regulators have become stricter and more cautious when dealing with crypto firms. According to some people, these new regulations are meant to make sure that both users’ funds will stay safe, but also to still allow for innovation at the same time.
Sam Blatteis, the head of The MENA Catalysts, believes that Dubai’s leaders have chosen to act this way in order to remain on good terms with countries in Europe and other Western parts of the world who are making crypto currency regulations tougher.
Blatteis said: “VARA wants to make Dubai a main hub for digital-assets trading while still being friendly with European nations who are getting stricter with how they regulate crypto.”
VARA’s Strict Rules Could Signal Trouble for CZ and Binance
According to a report from Bloomberg, VARA has stricter rules which could mean bad news for Binance CEO Changpeng Zhao. Recently, it was reported by CryptokenTop News that the CFTC (Commodity Futures Trading Commission) is suing Zhao and his company for not following the rules set by the US about derivatives trading.
CZ and Binance have been accused of breaking some rules, so many people have stopped using their exchange. Some people are also worried about who owns Binance and where their headquarters is located because they think it affects how the organization runs things.
There have been concerns about a crypto exchange called Binance, so regulators like VARA are asking them for more information about their company. Other crypto exchanges in the United Arab Emirates are also being asked to share extra details about what they do. What do you think about this? Let us know in the comments section.
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