- Facing increasing regulatory pressures, Binance has decided to withdraw an investment fund license application from Abu Dhabi authorities.
- The application had been submitted to the Abu Dhabi Financial Services Regulatory Authority (FSRA) since November of last year.
- The FSP license came after the Initial Approval (IPA) from the ADGM authority to operate as a broker for virtual assets.
Binance, the cryptocurrency exchange, decided to withdraw its license application in Abu Dhabi: What is the reason?
Binance Cancels License Application in Abu Dhabi
Leading cryptocurrency exchange Binance has decided to withdraw an investment fund license application from Abu Dhabi authorities amid growing regulatory pressures. BV Investment Management, Binance’s subsidiary in the United Arab Emirates (UAE), has chosen to abandon its application to obtain a license to operate an Abu Dhabi collective investment fund and, consequently, withdraw its application.
It is noted that the application had been submitted to the Abu Dhabi Financial Services Regulatory Authority (FSRA) since November of last year. In 2022, the digital asset service provider aimed to obtain a Financial Services Permission (FSP) to commence crypto custody services in the Abu Dhabi Global Market (ADGM). The FSP license granted Binance the authority to provide custody services to professional clients in the region if they meet the standards set by the FSP.
The FSP license followed the Initial Approval (IPA) from the ADGM authority to operate as a broker for virtual assets. Additionally, Binance became the first crypto exchange with an Operational Minimum Viable Product license in Dubai, UAE, providing access to regulated virtual asset services, including fiat onboarding and offboarding, under the investor protection and market integrity standards of the Dubai Virtual Assets Regulatory Authority (VARA). The example of El Salvador, where the exchange holds a full license, indicates that Binance is not entirely under pressure from regulations.
Regulatory Scrutiny Pressures Binance
A representative from Binance stated that the decision to withdraw the Abu Dhabi license application was made after evaluating the company’s global licensing needs and concluding that the application was unnecessary. Although the spokesperson claimed that the withdrawal had no connection with the recent practices affecting the exchange and its executives, it is clear that Binance is going through a challenging period.
A few weeks ago, the U.S. Department of Justice (DOJ) proposed a settlement condition of over $4.3 billion to resolve the ongoing investigation with Binance. This led to Binance founder Changpeng ‘CZ’ Zhao admitting guilt to a violation of money laundering regulations and stepping down from the CEO position of the exchange.
