Binance secures crypto license in Dubai
Binance, the world’s largest cryptocurrency exchange, has been granted a Virtual Asset Service Provider (VASP) license in Dubai, marking a significant regulatory achievement. This development follows the relinquishment of voting rights by co-founder Changpeng Zhao in the local Binance entity, a pivotal move that facilitated the license approval.
Changpeng Zhao’s role and regulatory compliance
In a strategic decision to comply with regulatory requirements, Changpeng Zhao gave up his voting power in Binance FZE, the Dubai-based unit of the exchange.
According to Richard Teng, CEO of Binance, this move was crucial for meeting the final stipulation set by Dubai’s Virtual Assets Regulatory Authority (VARA) for the issuance of the VASP license.
This step is part of a broader effort by Binance to align with international regulatory standards, especially in the aftermath of heightened scrutiny following the FTX collapse.
Impact of regulatory scrutiny on Binance
The license acquisition in Dubai comes at a critical time for Binance, which has recently faced significant regulatory challenges.
In November 2023, Binance agreed to a substantial $4.3 billion settlement with U.S. authorities to resolve charges of violating Anti-Money Laundering norms and the Bank Secrecy Act.
As part of this settlement, Zhao pleaded guilty to failing to maintain adequate AML protocols and resigned, with his sentencing scheduled for the end of April.
The decision to remove Zhao from a voting role in the Dubai unit reflects Binance’s commitment to compliance and governance reform.
VARA’s insistence on this change underscores the authority’s commitment to ensuring that Binance’s operations do not conflict with its recent U.S. legal resolutions.
Despite stepping down from direct governance, Zhao remains the ultimate beneficial owner of the parent company based in Abu Dhabi, maintaining his influential presence within the organization.
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