Binance, the world’s largest cryptocurrency exchange, secured a highly anticipated crypto license in Dubai following the resignation of Changpeng Zhao “CZ” as CEO.
Binance has received its Virtual Asset Service Provider (VASP) license after previous Binanace CEO Changpeng Zhao surrendered his voting power in the exchange’s local entity, said Binance CEO Richard Teng in a Bloomberg interview.
#Binance is proud to have received a Virtual Asset Service Provider (VASP) licence from Dubai’s Virtual Assets Regulatory Authority (VARA).
This milestone allows us to extend our services to the retail market alongside qualified and institutional investors.
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— Binance (@binance) April 18, 2024
This license allows Binance to offer its services as a cryptocurrency exchange – exchanging between different forms of virtual assets or between virtual assets and fiat currencies.
The Virtual Assets Regulatory Authority’s (VARA) final requirement for granting the VASP license was that Zhao give up his voting power in Binance FZE, the exchange’s Dubai-based unit.
Why Does Dubai Want CZ Out Of the Picture
In November 2023 Binance agreed to pay US authorities $4.3 billion as a settlement for violating the Bank Secrecy Act and failing to follow Anti-Money Laundering (AML) guidelines.
This came after Zhao pleaded guilty to violating US anti-money laundering regulations, failing to maintain adequate AML protocols, and resigned as CEO as part of the plea deal. Zhao’s sentencing is set for April 30. He faces up to 18 months in prison.
The delay in acquiring the license was mainly due to the looming settlement, which deterred Dubai VARA officials – not wanting to interfere with US authorities. As a result, the Licence required Zhao to give up his voting rights in Dubai FZE.
Zhao is still the ultimate beneficial owner of Binance FZE’s parent company, based in Abu Dhabi, even without voting rights.
What Does a Dubai Crypto Licence Mean for Binance
The full regulatory license could turn the tide for Binance, which has been under intense regulatory scrutiny for at least two years following the collapse of FTX.
In combination with Zhao’s regulation breaches, A mark has been left on Binance’s reputation as a transparent and secure platform.
This license could mark the turning point in this negative narrative, as a symbol of trust from a major jurisdiction that may restore faith in those who have doubted Binance’s position as the largest Crypto Exchange.
In addition to the prospective UAE market that it opens. Decentralized finance (DeFi), institutions, and individuals have received a strong interest from both the UAE government and its populace. The nation’s cryptocurrency user base topped 2.36 million in 2023. It is anticipated to reach 2.76 million in 2024.
This access allows Binance to compete with other exchanges that already have grounds in Dubai, including Bybit, eToro, and Crypto.com.