cryptocurrency regulation could be out in months in Saudi Arabia

cryptocurrency regulation could be out in months in Saudi Arabia

According to a recent interview by Zawya, with, Bandar AlTunisi, Head of Development at Binance in Saudi Arabia, high level digital currency regulation could come out in Saudi Arabia tomorrow or in a month’s time.

He states, “With discussions on cryptocurrency ongoing at several Saudi government bodies, Saudi Arabia, is looking forward to possible “high-level” regulation for digital currencies in the country this year.”

AlTunisi said there had been growth over the past seven years.  “It could be tomorrow, it could be in a month’s time, but once they’re ready, they will move quickly, which is what excites us about the Saudi market. I am hopeful about this year, but it is dependent on a lot of different factors,” he said.

Bader Al Kalooti, Head of Binance Middle East, Africa and Southern Asia (MEASA) and Turkey, said: “It is still very early. Relatively speaking, this is a nascent industry. The way these things tend to work, you will have disruptive technology roll out, then it takes a while to demonstrate that there is a product market fit, that people want this technology, then the regulations catch up.”

Dubai and Bahrain were early movers, he said, and other markets will catch up, although it will not happen overnight.

Bodies involved in studying potential crypto regulation include the Saudi Central Bank (SAMA), the Ministry of Communications and Information Technology (MCIT), which will be involved from a blockchain point of view, and the Capital Markets Authority (CMA).

Saudi Arabia also launched the Financial Sector Development Programme in 2018, under which the development of cryptocurrency regulation could also fall.

The creation of such regulation would be followed by a period of understanding how the regulations will be applied, AlTunisi said. Saudi is a priority market for crypto in general as well as Binance, he said.

“There is no other major exchange that has boots on the ground in Saudi in the way Binance does,” he adds, “Saudi is one of those places where once they move, they move big/. We really anticipate that there is going to be movement soon, and once they do, it is going to be a huge catalyst for growth in the industry.”

LaraontheBlock spoke withNaquib Mohammed, Founder and CEO of MRHB Network, who recently started operations in KSA, explained, ” We have been in meeting with stakeholders from SAMA ( Saudi Central Bank) on a regular basis. SAMA is working on regulations, but there is nothing happening anytime this year.”

MENA is home to three of the top 30 countries receiving crypto in Chainalysis index: Turkey (12), Morocco (20), and Iran (28). However, Turkey dominates in terms of raw transaction volume, but interestingly Saudi Arabia comes in third in terms of crypto value received, with UAE coming in at number two and Turkey taking number one place.

Binance and Blockchain center introduce Blockchain curriculum in Jordan

Binance and Blockchain center introduce Blockchain curriculum in Jordan

The Blockchain Center, which seeks to embed blockchain education into academic curricula across the globe by offering training programs for university educators, has partnered with Binance Academy; to expand its Global University Outreach program to included Jordan based Al Ahliyya Amman University.

The Blockchain Center and its initiatives across the glove aim to revolutionize blockchain education by integrating Blockchain Compliance and Blockchain Engineering into the curriculum of universities worldwide.

Al-Ahliyya Amman University, known for academic excellence, will now have access to a wealth of resources curated by Binance Academy and the Blockchain Center. In addition to providing training for university professors, the Blockchain Center will also offer expert-led workshops, seminars, and collaborative research opportunities. This program will provide students and faculty with firsthand experience in the dynamic landscape of blockchain technology.

Bandar Altunisi, Head of Development  Binance Academy in Saudi Arabia, “As a key player in the Global University Outreach Program, together with the Blockchain Center we are excited to welcome Al-Ahliyya Amman University to our network. This collaboration signifies our shared commitment to advancing blockchain education and empowering the next generation of industry leaders.”

The Global University Outreach Program, initially launched in 22 universities in Kazakhstan, plans to expand its reach to over 200 universities across more than 50 countries. With a focus on blockchain engineering and compliance, the initiative seeks to educate over one million students globally by 2026.

“Education is crucial in driving the adoption of blockchain technology into our daily lives,” remarked Aigerim Gilmanova, Head of Education Initiatives at the Blockchain Center. “By extending our program to Al-Ahliyya Amman University, we are fostering an environment where students can explore, experiment, and innovate within the field of blockchain technology.”

“This partnership aligns with our mission to stay at the forefront of technological advancements and provide our students with the skills they need for the future,” said Ahmad O. Hourani, Marketing and Communications Unit Director at Al-Ahliyya Amman University. “We look forward to contributing to the success of the Global University Outreach Program and advancing blockchain education globally.”

Binance adds 40 million users amid a tumultuous year

Binance adds 40 million users amid a tumultuous year

Despite the uphill battle that has faced Binance in 2023, in their recent 2023 yearend report, the company stated that they had increased their customer base by 30 percent, with 40 million new users. Binance now has a total of 170 million users.

As per the report, the company is focused on its user base and on strengthening their compliance program. The report states, “We are making important steps toward becoming a truly compliance-led organization. Above all else, we were able to maintain the trust of our growing community, which is fundamental to our mission of advancing the freedom of money globally.”

Binance added, “In 2023, we invested some $213M in our compliance program, up 35% from last year’s $158M\ But money alone does not capture the entirety of our commitment. Binance dedicates significant product and engineering resources to compliance. For example, we have built our own case management system in a matter of months, as well as an internal transaction monitoring engine and built in-house tools to help semi-automate the investigations process.  We have applied improved market surveillance controls, especially around wash or circular trading, to our trading platforms, including NFT marketplace, to ensure that the markets that we offer are fair and equitable for all participants.”

In the USA as per the terms of their settlement, Binance will hire an independent anti money-laundering consultant and will be subject to a multi-year financial monitorship, ensuring we receive strong compliance guidance. Binance’s corporate governance structure will evolve as well. A board of at least three independent directors, accountable to all stakeholders, will be the steward and governing body of the organization.

Binance hold licenses, registrations, and authorizations in 18 jurisdictions around the world.

But the crux of their efforts has been once again towards compliance. It invested in localized KYC vendor and product solutions to enhance the user experience and make the onboarding process seamless. They also embedded 10+ electronic ID (eID) solutions globally. Striving to deliver the best user experience, they added  support for 298 new ID and proof-of-address documents across 64 countries this year.  

The crypto exchange also processed over 58,000 law enforcement requests, serving some 13,000 registered officials worldwide through their Government Law Enforcement Request System. This is an improvement over 50,000+ requests that Binance handled in 2022.

Binance still awaits to receive a license in the UAE, and formally make the UAE one of its regional headquarters as a licensed entity.

Stefan Kimmel reveals M2 crypto exchange plans, and Bitcoin ETF

Stefan Kimmel reveals M2 crypto exchange plans, and Bitcoin ETF

LaraontheBlock interviewed the CEO of recently UAE licensed crypto exchange M2, Stefan Kimmel who had a lot to say on the future plans of M2, their product growth, partnerships, acquisition appetite, Bitcoin ETFs and license plans.

Why Abu Dhabi

According to Kimmel, launching a fully regulated, transparent clean startup from Abu Dhabi ADGM ( Abu Dhabi Global Market) was because the FSRA ( Financial Services and Regulatory Authority) in ADGM is one of the oldest most respected and esteemed regulatory authorities when it comes to virtual assets and crypto. FSRA as Kimmel explains has been around for five years and has a comprehensive solid framework. He stated, “ After all that has happened in crypto over the past few years, everyone is looking for a safe protected transparent exchange, and this is what we are offering from ADGM.”

M2 Strong liquidity

Another strong feature that M2 has is its strong liquidity which is essential for the success of any crypto exchange. As Kimmel explains, “ Liquidity is super important for successful crypto exchanges, and this is why we have partnered with global leading market makers, have tight spreads, and in terms of depth of key markets we are right up there with all the top players. Liquidity is key for good trading experience for investors and that is why we are connected with the largest global market makers and have deep liquidity especially on large crypto asset pairs.”

M2 investors

Speaking on M2 investors and whether the company will be seeking further investment, Kimmel replies that M2 is not seeking to raise capital any time soon. According to Kimmel, M2 is lucky to have an equity investment of $300 million which will give them a long run rate. According to Kimmel, “Our strategic key investor is Phoenix Group but we also have investment from several Abu Dhabi family offices.”

However for those who have asked or been interested in investing in M2, Kimmel states they have the option of investing in Phoenix Group which is now trading publicly on the ADX exchange in Abu Dhabi or they can buy the M2 MMX token on the M2 exchange and Uniswap.”

Noteworthy is that while Phoenix Group is a strategic investor in M2 it also partners with M2 on Bitcoin mining and Hashrate mining.

Acquisition appetite

As for M2’s acquisition appetite, Kimmel admits that if they find well regulated transparent crypto exchanges in countries of interest they would seek to acquire them. On whether M2 would be interested in Binance, he replies, “First Binance is not up for sale, and secondly we are on the lookout for fully regulated exchanges, as we want to be regulated, transparent and clean in everything we do. So we would have to choose an exchange that is in the same direction.”

The U.S. market

At the moment M2 is not interested in the U.S. market given the unclear regulatory situation. Kimmel states, “We will be staying outside of the USA unfortunately, given its current regulatory state. There are no rules we can apply or abide by currently in the USA only enforcement.”

However M2 is very keen on Europe given that Europe has come out with its MICA regulations for crypto service providers. He states, “Our next intention after receiving several regulatory licenses from ADGM and a license from the Bahamas is to acquire a license in Europe and we have filed for one in Spain.”

After Spain, M2 plans to apply for a license in the United Kingdom.

Bitcoin Earn Yield Product

The first product launched by M2 was Bitcoin Earn product. The product was launched in partnership with Phoenix crypto mining group and offers yields that reach up to 10.5%.

The pair designed a product that utilizes Bitcoin mining to offer genuine returns for investors. Most investment platforms that offer yield returns on crypto provide it through one of two routes. M2 are generating returns predominantly with Bitcoin mining, which underpins the M2 Earn product

Kimmel admits that the appetite for the M2 Bitcoin Earn product has been fantastic. He states, “This has been one of the most debated topics inside the M2 because a large share of deposits goes to the Bitcoin Earn product. 10.5% is amazing given that it is hard to earn decent returns on Bitcoin.”

According to Kimmel it is not that difficult to offer 10.5% returns because as he notes, “Given that we are partially owned by Phoenix Group, we reinvest in Bitcoin mining which offers higher returns than 10%, the other two angles is on platform lending which is over collateralized and fully on platform, and a small percentage goes into Proprietary Trading (Prop Trading) market making and basic arbitrage, but no big exposures, as we are not trying to take on risks.”

According to Kimmel even if the crypto markets are not doing well since the investment is in Bitcoin and the interest return is in Bitcoin, then there is no FX market exposure.

Future product offerings partnerships

Kimmel is excited about the future of M2 after going live and ensuring that the processes in place are scalable and robust. Next up are more product offerings, partnerships, and maybe an ETF.

Kimmel explained, “In Q1 of 2024 we will be coming out with a crypto payment card. We will also be offering fiat on and off ramp with one of the banks in the UAE. In addition we have partnerships coming up with big retail names in the country to reach a bigger customer base.”

When asked about the potential of a Bitcoin ETF product, Kimmel confesses that this is absolutely on the radar. He says, “We are already having initial exploratory discussions on it.”

Outlook on crypto exchanges and DeFi

In terms of the bigger global situation when it comes to crypto exchanges, competition and DeFi, Kimmel believes that given that today there are around 600 crypto exchanges globally, we will definitely see some closing down because of the regulatory requirements, others being bought because the market cannot accommodate so many crypto exchanges. He explains, “ We will not only see consolidations in the UAE as crypto exchanges struggle to meet tighter regulatory environment, but there will also be eliminations as market gravitate towards the stronger players.”

In terms of centralized crypto exchanges versus decentralized using DeFi, Kimmel believes that for mass adoption to take place, centralized exchanges are a must. Kimmel, “As we drive for mass adoption the vast majority will struggle with decentralized user experiences, such as managing wallets, on and off ramp, which is hard, in addition we also have governments and regulators who struggle in DeFi, where it is anonymous and users as well may not subscribe to that ethos. For institutional adoption this can only happen in centralized platforms.”

Binance drops Abu Dhabi, keeps Dubai, but will Dubai drop Binance?

Binance drops Abu Dhabi, keeps Dubai, but will Dubai drop Binance?

Binance one of the biggest global crypto exchanges has withdrawn and dropped its license application with Abu Dhabi’s ADGM ( Abu Dhabi Global Market) while it retains its license application at Dubai’s VARA ( Virtual asset regulatory authority).

This comes exactly one year after Binance received a Financial Services Permission (FSP) from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), the international financial center of the UAE’s capital emirate.

The withdrawn license would have allowed Binance to manage a Collective Investment Fund, under conditions that BV Investment Management Limited may not hold or control Client Assets; and BV Investment Management Limited may not deal with Retail Clients as defined under the FSRA Conduct of Business Rules (COBS).

This should not be a surprise given that recently Richard Teng, Binance’s new CEO during the FT Crypto and Digital Assets Summit, would not name the location of the company’s headquarters yet admitted that Binance’s Middle Eastern headquarters is in Dubai, while its European headquarters is in France.

He suggested that the location of the global headquarters would be disclosed when deemed appropriate.

So it seems that Binance is putting all its license eggs in one basket in the UAE, with Dubai’s VARA. Some have speculated that most probably they will receive the license in Dubai and thus do not need to have one in Abu Dhabi. Yet the License in Dubai is still not in the bag.

In early December Dubai’s virtual asset regulator came out with a statement, saying that it is continuing to asses and monitor Binance activities to strict regulatory requirements, rigorous KYC and due diligence. As per VARA, Binance FZE crypto exchange currently only holds a Minimum Viable Product [MVP] Operational License with VARA, which allows them access to a restricted client base. As such to date, Binance has on boarded approximately 180 qualified investors and institutional clients.

As per Reuters, the exchange deemed it unnecessary given the reassessment of global licensing needs.

Binance’s custodial license application within ADGM is still active until May 2024.

Binance is not the only crypto exchange to have withdrawn its license in ADGM, BitOasis also withdrew its license in ADGM, as has DEX.

This comes after M2 became a fully licensed crypto exchange from Abu Dhabi UAE which can offer retail clients crypto exchange services.

Binance executes first crypto triparty agreement with a bank partner

Binance executes first crypto triparty agreement with a bank partner

Binance in a recent press release dated November 30th 2023 and coming out of Dubai UAE has announced that it has successfully executed the world’s first cryptocurrency triparty arrangement with a third party banking partner. As per the release, the solution enables institutional investors to keep trading collateral, off-exchange in the custody of a third party banking partner. This is the first in a series of pilot projects initiated by Binance, which is currently the only cryptocurrency exchange offering such a solution.

Binance does not mention the name of the bank, but states that this arrangement directly tackles the issue of counterparty risk, the primary concern for institutional investors today. It replicates a framework common in traditional financial markets, which enables investors to proportion their crypto-asset allocation based on their risk tolerance. Collateral held with the banking partner can be in the form of fiat equivalent such as Treasury Bills which has the added benefit of being a yielding asset.

Catherine Chen, Head of VIP and Institutional at Binance, said, “Counterparty risk has long been a concern of institutional investors across the industry. Our team of crypto natives and traditional finance professionals has been exploring a banking triparty agreement for more than a year to address their concern. We’ve developed a solution that ensures our institutional clients can optimize their collateral and cryptocurrency investments, modeled after the traditional markets’ trading conduct. We are in close discussions with an array of banking partners and institutional investors who have also expressed strong interest in participating.”

Binance crypto exchange is being monitored by Dubai’s Virtual asset regulator

Binance crypto exchange is being monitored by Dubai’s Virtual asset regulator

As the woes pack up on Binance crypto exchange, first with the guilty plea from CZ, and then Ronaldo being sued because he promoted Binance products, the Dubai Virtual asset regulator VARA has made a statement that it is continuing to asses and monitor Binance activities to strict regulatory requirements, rigorous KYC and due diligence.

As per VARA, Binance FZE crypto exchange currently only holds a Minimum Viable Product [MVP] Operational License with VARA, which allows them access to a restricted client base. As such to date, Binance have on boarded approximately 180 qualified investors and institutional clients.

VARA notes that it  cannot comment on regulatory and enforcement actions taken on business conducted in other jurisdictions, but does assure, “ We have been, and will continue to be, closely monitoring ongoing developments and specifically how they relate to Binance FZE operations in accordance with our commitment to uphold market integrity, consumer protection, and the security of the domestic ecosystem.”

Binance while being one of the first to apply for a license in the UAE, has been late in receiving a license while others such as M2 in Abu Dhabi, RAIN crypto broker, CoinMENA, Fasset,  and many others have been able to become fully licensed.

It seems that Richard Teng, the new CEO of Binance will have a lot on his plate in the coming months.

VARA to license 15 entities by end of 2023, and launch DeFi regulations, Gamefi, and crypto derivatives

VARA to license 15 entities by end of 2023, and launch DeFi regulations, Gamefi, and crypto derivatives

In a recent LinkedIn post, Soham Panchamiya, Associate for tech companies and regulatory disputes at Reed Smith, one of the leading global law firms with more than 1,500 lawyers in 30 offices throughout the United States, Europe, the Middle East and Asia, announced that they are expecting Dubai Virtual Asset Regulatory Authority (VARA) will fully license 15 entities before the end of 2023.

According to Panchamiya, “New developments continue to come forward in the UAE VARA in Dubai is making great strides to earn its stripes as the premier regulator for crypto and Web3 companies in the world.”

He also expects major announcements and change for game-fi, DeFi and crypto derivatives.

So far Dubai VARA has already fully licensed four crypto exchange, brokerage, and custodial firms. Most recently is BackPack exchange, TOKO, received full crypto exchange licenses, while Komainu received full crypto custodial and custody staking services. VARA was one of the first regulators globally to issue crypto staking regulations.  The fifth license was given to Laser Digital for crypto broker and investment services.

On VARA’s register listing are 11 entities that have either received a full license or at the MVP preparatory or operational phase. These include names such as Bybit crypto exchange, Binance, OKX, crypto.com, GCX exchange, as well as Hextrust crypto custodian. Meanwhile, BitOasis license is still inactive, after it had received MVP operational license.

There are others who have received preliminary approval not listed on VARA website.

Given the current numbers, VARA will be licensing 11 more entities before the end of the year.

In August 2023, the Dubai Department of Economy and Tourism and Dubai VARA signed an MOU to unify VASP (virtual asset service provider) offering in the city. The two entities are collaborating to offer a synchronized VA market assurance across the Emirate of Dubai –spanning Customer Care + Complaints; [Business] On-Site Inspection + Enforcement; [Business] VASP Registration + Licensing; [G2G + G2B + G2C] Education-Training-Knowledge Sharing.

During DACOM (The Digital Asset Compliance and Market Integrity Summit) hosted by Solidus Labs, a crypto-native market surveillance and risk monitoring hub tailored for digital assets, in Abu Dhabi in May  2023, Henson Orser CEO of VARA stated, that the future will include tokenization of real world assets, including real estate, as well as micro financing, royalty rights for creators and publishers, with smart contracts for movies /music, permissioned DeFi (Decentralized Finance), gaming and the metaverse. Here he sees, “A billion users will start to challenge the boundaries of title and value” and finally interoperability, transfers identity and more.

Furthermore in an exclusive LaraontheBlock interview with Henson Orser, discussing VARA stated that while the term DeFi is not specifically referenced in the 7 Rulebooks from VARA, DeFi lies very much at the core of Dubai’s Future Economy considerations. Orser explained that VARA’s Rulebooks have focused on facilitating borderless ‘value-exchange’ both in the traditional and new economy contexts, by leveraging a full spectrum of cross-cutting ‘activities’, which should not in any way be construed as TradFi specific.

He stated, “We are well aware that in this sector new technologies and products will be continually emerging, and constructively challenging traditional financial systems. It is exactly for this reason that VARA has been constructed as a technology agnostic and product-neutral framework that allows us to remain progressive and future-focused.  This means that our regime will provide for R&D sandboxes to test, learn and evolve prototypes across DeFis and DAOs today, to wider innovations across Metaverse and Web3.0. As we have maintained, the VARA Regulations will strike a measured balance between remaining agile so we benefit from future waves of technological innovations, yet being definitive in their ability to provide the required market certainty, FATF assurances, and cross-border security which are non-comprisable to us.”

In September 2023, VARA updated its virtual asset rulebook and added new regulations with regards to what it calls Fiat referenced virtual asset ( FRVA) better known to most as virtual assets pegged to a stable value, or stablecoins.

Prior to that VARA opened the door to regulate crypto staking services with its revised Custody Services Rulebook, allowing staking by virtual asset custody Service providers. As per the revised rule book, virtual asset service providers who carry out custody services can offer staking services as well without obtaining a separate license for VA Management and Investment Services. Additional licensing and supervision fees will be payable in connection with the provision of this additional service.

As per Panchamiya in his post, he states, “Not a bad start. It remains to be seen how viable the industry sector is going to be moving forward as the continuance of the bear market dampens spirits worldwide, but with the spot ETF movements in the US, the recent wins in courts and the continued regulatory developments, it seems that market players and UAE regulators are bullish.”

3,000 Bahrain retailers now offer crypto payments with Binance Pay

3,000 Bahrain retailers now offer crypto payments with Binance Pay

Binance Pay has announced that it is now offering its cryptocurrency transaction platform with over 3,000 Bahrain retailers. Binance pay is working with online as well as physical store to offer secure crypto payments.

The Bahrain retailers include names such as Sharaf DG, the electronic retailer in Bahrain. In addition to local fast food chain Jasmis, as well as STC Bahrain, LuLu HyperMarket, Dose Café, Al Zin Jewellry, Salmabad, Wadi Al Sail and Hawar, petrol stations, Pet Arabia, Premier Motors Showroom, Reebok store and many more.

As per the announcement, “With the continuously growing adoption of blockchain technology and digital currencies, this revolution is just the beginning. Be part of it by supporting these merchants and making a transaction the Binance way!”

In January 2023 Binance celebrated its official entrance into Bahrain. Binance received its official license in October 2022. On entrance Binance Pay partnered with Bahrain Eazy Pay to introduce crypto payments for Bahrain real estate developer Bin Faqeeh Real estate Investment.

Binance also launched crypto futures products in Bahrain after receiving regulatory permission.  With this Binance Bahrain BSC became the first regulated exchange in the region to offer these services and the only exchange with a CAT4 license.

This came after Binance suspended its crypto debit card services in Latin America and the Middle East from Aug. 25. The crypto debit card services in Latin America and the Middle East were terminated Sept. 21, but the exchange claimed refunds and disputes could still be processed until Dec. 20, 2023.

Binance launches crypto futures products in Bahrain after it ends its crypto debit card offering with MasterCard

Binance launches crypto futures products in Bahrain after it ends its crypto debit card offering with MasterCard

Binance crypto exchange has announced the launch of crypto futures products in Bahrain after receiving regulatory permission.  With this Binance Bahrain BSC becomes the  first regulated exchange in the region to offer these services and the only exchange with a CAT4 licence.

The launch of these products follows a comprehensive regulatory review and consultation period to ensure that Binance Bahrain BSC, which operates the regulated Binance Bahrain platform, has met the necessary compliance and governance requirements to offer futures products locally in a regulated manner.

Eligible local users must complete and pass a mandatory suitability assessment questionnaire in order to access the products.

Tameem Al-Moosawi, General Manager of Binance Bahrain, said: “Binance is committed to compliance and its users, and we are focused on building the local digital assets ecosystem that is sustainable for the long-term.”

This announcement comes after cryptocurrency exchange Binance announced it  will suspend its crypto debit card services in Latin America and the Middle East from Aug. 25. The crypto debit card services in Latin America and the Middle East will be terminated by Sept. 21, but the exchange claimed refunds and disputes can still be processed until Dec. 20, 2023.

Binance was working with Mastercard in Bahrain but the crypto card program has been ended. Mastercard and crypto exchange Binance  ended four crypto card programmes in Argentina, Brazil, Colombia and Bahrain as of Sept. 22, a spokesperson for Mastercard said via email on Thursday.

The Binance cards allowed users to make payments in traditional currencies, funded by their cryptocurrency holdings on the exchange.