Binance, the largest cryptocurrency exchange in the world, has finally obtained a regulatory license in Dubai. According to anonymous sources cited by Bloomberg on April 18, Binance received its Virtual Asset Service Provider (VASP) license after its co-founder, Changpeng Zhao, relinquished his voting power in the exchange’s local entity. The final requirement for the VASP license from the Virtual Assets Regulatory Authority (VARA) was for Zhao to give up his voting power in Binance FZE, the Dubai-based unit of the exchange. Binance’s current CEO, Richard Teng, confirmed the receipt of the license but denied the speculation that Zhao had given up his voting power.
This regulatory license is a major milestone for Binance, which has faced regulatory scrutiny since the collapse of FTX. In November 2023, Binance agreed to pay a $4.3 billion settlement to US authorities for violating the Bank Secrecy Act and failing to implement Anti-Money Laundering (AML) protocols. As part of the plea deal, Zhao pleaded guilty to one felony count and resigned from his position. His sentencing is scheduled for April 30, and he could face up to 18 months in prison.
The reason for VARA requiring Zhao to surrender his voting powers in Dubai was to ensure that they did not interfere with Binance’s settlement with US authorities. VARA wanted to examine the products that the exchange planned to offer in Dubai after Zhao gave up his voting control. Despite losing his voting rights, Zhao remains the ultimate beneficial owner of Binance FZE’s parent company based in Abu Dhabi.
Obtaining a full license in the United Arab Emirates has been a key goal for Binance’s future operations. Alex Chehade, the general manager of Binance Dubai, stated that the exchange received a preparatory minimal viable product license from VARA in September 2022, allowing them to offer digital asset services to qualified retail and institutional investors.
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