The Virtual Assets Regulatory Authority (VARA), the entity that oversees crypto activities in Dubai, has requested Binance to provide more information on its trading requirements in its efforts to toughen regulatory barriers in the emirate, Bloomberg reported.
Citing three anonymous sources, Bloomberg reported on April 5 that the regulator had asked Binance to come forward with more information about the exchange's ownership structure, governance, and audit processes. People close to the matter said that VARA has requested the same details from global crypto players seeking to obtain a license in Dubai.
VARA officials have also requested Binance to provide similar information, in addition to board procedures, at the global group level, with inquiries taking longer to address given the size and complexity of the exchange, two of the sources said.
Increased scrutiny over virtual asset service providers (VASPs) in Dubai adds to Binance's woes as it faces more pressure from regulators in the United States.
Last week, the United States Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its CEO, Changpeng Zhao, alleging that the exchange engaged in improper trading and compliance procedures.
Zhao ever since rejected the claimscalling them "an incomplete recitation of facts" and that Binance "does not trade for profit or 'manipulate' the market."
my response to the CFTC complaint | Binance Blog https://t.co/TadyotM7HN
โCZ Binance (@cz_binance) March 27, 2023
Binance received a minimum viable product (MVP) preparatory license of VARA in September last year. The permit allows the platform to establish an office in the United Arab Emirates and provide digital asset exchange services to pre-qualified investors. However, the company is not yet able to offer locally regulated digital asset services in the emirate.
The largest cryptocurrency exchange by trading volume would have to submit the necessary requirements to VARA to upgrade to an operational MVP license, allowing it to offer its services to qualified individual and institutional investors, before obtaining a full-market product permit. .
Related: From groceries to luxury cars: The state of cryptocurrency adoption in Dubai
Currently, only digital asset custodian Hex Trust has obtained an operating MVP license from the Dubai regulator.
According to the VARA website, VASPs already serving must meet their requirements before the end of June.
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