Report: Binance Asked to Provide More Information as Dubai Tightens Screws Against Crypto Entities
A Bloomberg report said that Dubai regulators asked Binance for more information after the collapse of crypto exchange FTX. According to the April 5 report Dubai’s Virtual Assets Regulatory Authority has in recent weeks asked Binance for more information about its ownership structure, governance and auditing procedures.
As reported by Bitcoin.com News previously, Binance was not granted an FMP (full market product) license. VARA states that only license holders can offer full range of services to Dubai residents. Binance and other crypto exchanges were granted the minimum viable product (MVP), license. The holders of this license are able to offer their services to a range of approved virtual asset-related services “to suitably qualified institutional and retail investors in Dubai.”
Following the sudden collapse in Sam Bankman-Fried’s FTX, global regulators, including VARA, are believed to have taken a more strict stance with regard to crypto firms. The report quotes unidentified sources as saying that the new approach aims to balance innovation with protecting user funds.
Sam Blatteis (CEO of The MENA Catalysts) suggested that Dubai authorities took this approach to preserve good relations with their Western counterparts.
Blatteis reported that VARA wants Dubai to become a capital for digital-assets economic growth while protecting its business relationships with Western jurisdictions such as Europe, which are adopting stronger crypto regulations.
Questions about Binance’s Governance Credentials
The Bloomberg report suggests that VARA’s stricter approach could cause problems for Binance CEO Changpeng Zhao, who already has legal issues in the U.S.
CZ and Binance deny the allegations. However, many exchange users were forced to leave the platform by the announcement of the lawsuit. Binance’s complex ownership structure is also alleged to be a factor in the alleged violations of derivative rules. Binance’s absence of a global headquarters has raised questions about its corporate governance.
Regulators like VARA have asked for more information on Binance’s ownership structure, board procedures and other allegations against the crypto exchange. According to the report, other crypto exchange platforms in the United Arab Emirates (UAE), have also been requested to provide more information to VARA.