Abu Dhabi has granted regulatory approval to leading cryptocurrency exchange Binance to offer its crypto-services to professional clients.
The exchange received a Financial Services Permission (FSP) from the Financial Services Regulatory Authority (FSRA) in the Abu Dhabi Global Market (ADGM).
“We look forward to supporting Binance’s operations and R&D in ADGM to develop solutions for the Web3.0 economy,” said Ahmed Jasim Al Zaabi, Chairman of ADGM.
According to Richard Teng, Regional Head of MENA and Europe,
“Working with the ADGM and FSRA has been a highly collaborative process that underscores the value of cooperation between our industry and the public sector.”
Binance received its In-Principle Approval (IPA) from the ADGM regulator to operate as a broker-dealer in virtual assets in April 2022.
Expansion into the Middle East amidst regulatory troubles
Founded in 2017, Binance is today the world’s largest cryptocurrency exchange. Besides other parts of the world, the Middle East remains an area of interest for the exchange. In addition to Europe and Asia, the exchange has been looking to expand in the Middle East too.
In August 2022, Binance was granted a crypto-asset service provider license from the Central Bank of Bahrain (CBB). This was the exchange’s first license as a crypto-asset provider in The Cooperation Council for the Arab States of the Gulf (GCC), the statement mentioned.
Later in September 2022, Binance received the Minimal Viable Product (MVP) license from Dubai’s Virtual Asset Regulatory Authority (VARA).
In October 2022, Binance reported a rise in user growth across the Middle East and Northern Africa (MENA) region. In fact, it has recorded a 49% hike in user sign-ups so far in 2022.
That being said, troubles from regulators keep haunting the exchange.
In June 2021, UK’s Financial Conduct Authority (FCA) warned that Binance isn’t permitted to execute any regulated activities without prior written approval. Around the same time, Japan’s Financial Services Agency cautioned that the exchange is not registered to do business in Japan.
Bloomberg reported in September 2022 that the U.S’s Commodity Futures Trading Commission (CFTC) was examining if Binance engaged in insider trading or market manipulation. This, by trading on customer orders before executing them.
Binance has had its fair share of trouble from regulators in France, Germany, Thailand, and other countries too.
Abu Dhabi in the direction of regulating crypto?
The FSRA has published the guiding principles on Abu Dhabi’s approach to digital asset regulation and supervision. These principles seem to be complying with the global standards in Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) norms.
In addition, these principles also point to compliance with different jurisdictions amidst close financial scrutiny.