Binance, one of the world’s largest cryptocurrency exchanges, has withdrawn its application for a regulatory license in Abu Dhabi, according to a statement from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).
The FSRA said that Binance had submitted an application for a crypto asset services provider license in May 2023, but decided to withdraw it on December 8, 2023, without providing any reasons. The FSRA added that it had not granted any license or authorization to Binance or any of its affiliates to operate in ADGM or the United Arab Emirates.
Binance’s withdrawal comes amid a global regulatory crackdown on the crypto industry, as authorities in various countries have raised concerns about money laundering, tax evasion, consumer protection and market stability. Binance has faced regulatory challenges in several jurisdictions, including the UK, Japan, Germany, Singapore, Canada and the US.
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Binance has not issued any official comment on its withdrawal from Abu Dhabi, but its CEO tweeted on December 9 that “Binance is always looking for the best places to serve our users and grow the industry. We are grateful for the support and guidance from regulators around the world and will continue to comply with local laws and regulations wherever we operate.”
Crypto License Application in Dubai
Dubai is one of the most attractive destinations for crypto businesses, thanks to its favorable regulatory environment, innovative ecosystem, and strategic location. However, operating a crypto business in Dubai requires obtaining a license from the relevant authorities, which can be a complex and time-consuming process. In this blog post, we will explain the steps and requirements for applying for a crypto license in Dubai, and how we can help you navigate the legal and technical challenges.
A crypto license is a type of authorization that allows a company to offer crypto-related services in a certain jurisdiction. Crypto-related services include, but are not limited to, exchanging, storing, transferring, issuing, or managing crypto assets, such as Bitcoin, Ethereum, or stablecoins. Depending on the nature and scope of the services, different types of licenses may be required.
Why do you need a crypto license in Dubai?
Dubai is a global hub for finance, trade, and innovation, and has been embracing the potential of blockchain and crypto technologies for several years. The Dubai government has launched several initiatives to support the development and adoption of these technologies, such as the Dubai Blockchain Strategy, the Dubai Future Foundation, and the Dubai International Financial Centre (DIFC).
However, operating a crypto business in Dubai also requires complying with the local laws and regulations, which are designed to protect the interests of consumers, investors, and the financial system. The main regulators for crypto businesses in Dubai are:
- The Dubai Financial Services Authority (DFSA), which oversees the DIFC, a special economic zone that offers a common law framework and a tax-free regime for financial services firms.
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The Securities and Commodities Authority (SCA), which regulates the securities and commodities markets in the UAE, and issues licenses for crypto asset service providers.
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The Central Bank of the UAE (CBUAE), which supervises the banking and payment systems in the country and sets the rules for dealing with virtual currencies.
Depending on the type and location of your crypto business, you may need to obtain one or more licenses from these regulators before you can start operating legally in Dubai.
How to apply for a crypto license in Dubai?
The process and requirements for applying for a crypto license in Dubai vary depending on the regulator and the type of license. However, some common steps and documents that you will need to prepare are:
- A detailed business plan that outlines your business model, target market, competitive advantage, financial projections, risk management, compliance policies, and governance structure.
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A technical whitepaper that describes your crypto asset or service, its features, functionality, security measures, and technical specifications.
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A legal opinion that confirms the legal status and classification of your crypto asset or service under the UAE laws and regulations.
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A proof of funds that demonstrates your financial capacity and solvency to operate your business.
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A due diligence report that verifies your identity, background, qualifications, experience, and reputation as a crypto business owner or operator.
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A fee payment that covers the application processing and licensing costs.
Once you have prepared these documents, you will need to submit them to the relevant regulator through their online portal or physical office. The regulator will then review your application and conduct an assessment of your business. This may involve conducting interviews, site visits, audits, or tests. The regulator will then issue a decision to approve or reject your application within a certain timeframe.
Abu Dhabi is one of the leading financial centers in the Middle East and has been trying to attract more crypto businesses to its jurisdiction. In June 2018, the FSRA issued a comprehensive regulatory framework for crypto asset activities, covering areas such as licensing, governance, capital requirements, risk management, anti-money laundering and consumer protection.
The FSRA said that it remains committed to supporting innovation and fostering a conducive environment for the development of the crypto sector in ADGM and the UAE. It also said that it will continue to monitor the global developments and trends in the crypto industry and update its regulatory framework as appropriate.