UAE based Hex Trust, crypto custodian receives first MVP operational license from VARA

UAE based Hex Trust, crypto custodian receives first MVP operational license from VARA

UAE – Hex Trust is the first entity to have received an MVP Operational license from VARA. This is the third licensing stage within the VARA framework, before the FMP Operational license. This means that Hex Trust can now operate under VARA supervision and monitoring. (for more information, please see review www.vara.ae)

Mohamed Reda El Sheikh, Head of Compliance MENA &MLRO at Hex Trust, a certified Blockchain Cryptocurrency Auditor, announced this in a LinkedIn post. In the post, El Sheikh stated, “The day has finally arrived. Hex Trust is the first entity to be granted the MVP operational license, and I am the first compliance officer “MLRO” to operate under the first specialized cryptocurrency regulator in the world “VARA”. Getting this done is a team effort, and without the support of my superstar colleagues at Hex Trust, I would not have been able to accomplish it.

LaraontheBlock spoke with El Sheikh to learn more. El Sheikh explained, “We have received a Minimum Viable Product (MVP) Operational license, which allows us to offer services only to institutional clients”. As a result, we will soon start onboarding institutional clients for our crypto custody and staking services. These will be the only two services we offer to cryptocurrency institutional clients.”  

He adds, “As a regulated custodian, we must legally and technologically segregate Clients’ assets under custody.” 

In November 2022 Hex Trust received its MVP preparatory license and after adhering to all the requirements and reporting policies required from VARA are now fully operational. 

El Sheikh adds, “The license application journey was a learning experience for Hex Trust” and “the regulator was supportive throughout the process.” 

UAE has not granted a single operational virtual asset license VARA and UAE Minister announce

UAE has not granted a single operational virtual asset license VARA and UAE Minister announce

As HE Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications participated in the WEF session ‘Finding the right balance for crypto’  announcing that the UAE has not licensed a single crypto exchange, concurrently the Dubai based Virtual Asset Regulatory Authority (VARA)  affirmed this on its website in its latest announcement.

Al Olama told audiences at WEF, that the regulations in UAE are not light. There are extensive regulations at VARA. He affirmed, “ UAE has not issued a single licensed crypto exchange in UAE neither Binance nor FTX.” He explained that there is a four step process  and to date, “no one was able to onboard any customers even last week.”

Concurrently VARA stated on its website, “VARA has not granted any operating permits to date this is a four stage licensing process” VARA’s website explained, that the VARA regime is founded on the principles on enforcing responsible market participation backed by a future-proofed and responsive regulatory framework that remains technology agnostic; that collectively deliver socio-economic stability; robust consumer protection; and jurisdictional resilience.”

As such there are four stages to regulation at VARA, the first is Provisional permit; graduating to a 2-step [(2) Preparatory + (3) Operating] Minimum Viable Product (MVP) license; and culminating at the (4) Full Market Product (FMP) license.

The fourth stage takes into effect after regulations have been tested within the regime. As such according to VARA every Virtual Asset Service Provider [VASP] must go through all 4 stages in this current environment, wherein VARA expects to evaluate, observe, and only then authorize suitably qualified entities to undertake any market servicing activities under its licensing regime.

VARA then clarifies that at this stage the only licenses that have been issued are Stage Gate (1) Provisional or (2) MVP-Preparatory to enable VASPs to fulfill all pre-conditions, and undertake readiness steps establish offices, onboard employees with work visas, secure domestic bank account etc. prior to being in a position to undertake any market operations.

So VARA affirmed that no VARA licensee has, to date, been awarded an MVP-Operating permit.

Each VASP that is awarded an MVP license must comply with the [MVP License Conditions Document] issued by VARA, and strictly adhere to the licensing conditions outlined in the appended letter. One of the MVP conditions is that VA activities during this phase may only be provided to qualified and/or institutional investor segments.

Mass retail consumers are strictly prohibited until the Stage Gate (4) FMP license approval has been secured. [Virtual Assets and Related Activities Regulations 2023] will stipulate relevant licensing conditions and requirements.

VARA adds that when it publishes its full market regulation, it will enable borderless economic opportunity across the global VA industry, protecting investors and market participants, backed by active enforcement of all regulatory requirements beyond security and cross-border compliance including those pertaining to custody and segregation of client money; prudential requirements (viz. insurance and liquidity cover); FATF compliance, market manipulation and/or abuse prevention.

In terms of Virtual Assets Exchanges, VARA has awarded Binance (MVP Preparatory License Issued) while Bybit, Crypto.com, Equiti, GCEX, Huobi, and OKX have provisionary approval and started the process.

In terms of Virtual Assets Payment Services, Zamp has applied and have provisional approval. 

In terms of Virtual Assets Broker – Dealer services those who have applied and been granted provisional approval include BitOasis, CoinMENA, MidChains and Scallop

Virtual Assets Issuance Services include Calvin Cheng Web3.0 Holdings, Hike, Monstera, Prypto, Woonkly Labs, and Xfinite

While under Virtual Asset Custodians only Hex Trust (MVP Preparatory License Issued) and Komainu (MVP Preparatory License Issued)

Virtual Assets Management/ Investment Services: Amber Group, BRE Holdings, Brevan Howard, Fintonia Group, NineBlocks, NOIA Capital, TPS Capital and Q9 Capital have all been granted provisional approvals, first stage. 

Al Olama also noted at the WEF session that the job of a regulator is to try and be proactive and to protect people as much as possible whenever people adopt a technology. He states, “In UAE we have a young population so we need to ensure that we regulate fast because youth are early adopters. He added, “The UAE wants to protect talent since we aim to be the country with the highest per capital talent on earth.”

According to him there are other sides of crypto such as Web3 and UAE wants to attract Web3 and Blockchain talent. Blockchain is a technology of the future given that traceability cannot be removed. This according to H.E. Al Olama is a positive thing for the world as it is easier to trace someone who transacts through Bitcoin than through hard cash.”

He ascertained that regulators across the board need to work together. First bad actors should not be able to move from one place to another, and the same incidents should not be repeated tomorrow.

In terms of DeFi Al Olama believes it is is evolving and is least regulated. He states, “ We want to jump into each vertical on its own, the only issue we have is that while the UAE government can move fast  if we work with other governments as teams and we all scrutinize  every single vertical it is better as we cannot wait for next catastrophe.”

UAE to issue stablecoin for payments legislation soon and maybe even DeFi

UAE to issue stablecoin for payments legislation soon and maybe even DeFi

As per a recent PWC Crypto regulation report 2023, the UAE has finalized its crypto regulation, includes AML/ CTF Money laundering and counter terrorist financing rules as well as its travel rule and has already prepared the stablecoin regulation for payments which is awaiting final legislation. ( refer to graph page 8 of report).

For those not familiar with the travel rule, it is a Bank Secrecy Act (BSA) rule [31 CFR 103.33) which requires all financial institutions to pass on certain information to the next financial institution, in certain funds transmittals involving more than one financial institution.

This PwC Global Crypto Regulation 2023 report provides an overview of the crypto regulation landscape, with a focus on financial services. It offers insights into how the regulatory frameworks are developing across the world and seeks to identify how this may impact relevant industry participants and virtual service providers within the financial services sector.

The report notes that UAE authorities are assessing their approach to areas including stablecoins and wider DeFi.

In addition as per the report, the Central Bank of UAE is establishing its position in communicating permissible virtual asset activities to local banks. These include opening accounts for Virtual Asset Service Providers (VASPs) better known as crypto exchanges. 

 UAE Securities Commodities Authority with its Decision on Crypto Assets Activities Regulation (CAAR), regulates the offering, issuing, listing and trading of crypto assets in onshore UAE. This includes the initial coin offering exchanges, marketplaces, crowdfunding platforms, custodian services and related financial services based upon or leveraging crypto assets.

In December 2022 the UAE Cabinet updates some of its legislations including those pertaining to virtual business and virtual assets allowing them to be regulated onshore.

As for the rest of the GCC and Arab countries, the report notes that Bahrain has implemented crypto regulations and AML/CTF  yet has not implemented neither the travel rule nor stablecoin regulations for payments.

Jordan, Kuwait, and Oman have not initiated a crypto regulation process, while KSA and Qatar have prohibited cryptocurrencies.

It is interesting that while the report for example considers that Oman has not initiated the crypto regulation process, Oman had announced in 2021 that it was launching through the Central Bank a high level Oman cryptocurrency task force to study the economic advantages and disadvantages of authorizing the use of cryptocurrencies in the country.

In January 2022 Oman capital markets Authority announced a tender for specialized companies to assist in setting up a legislative and regulatory framework for virtual assets and licensing supervision and regulations of Virtual assets service providers within the Sultanate of Oman. Since then no other announcements have been made.

Both Bahrain and Oman have allowed crypto payments to be made in the country through virtual asset providers. Oman based, cryptocurrency broker, Easy Coins launched its trial of Tether USDT on the Tron Blockchain. Accordingly Easy Coin users in Oman can now purchase TRC20 USDT. At the end of 2021 there were 43 thousand registered crypto wallet addresses in Oman.

In the meantime even stablecoins are being trialled in Oman. The Oman Water and Waste Water Services Company (OWWSC), member of Nama Group, to trial a stablecoin linked to the Oman Riyal. The company signed an MOU with Oman based Digital Digits, the creators of Easy coins and Connected Chains to trial “ Hasalah” a stablecoin Wallet.

While in Bahrain EazyPay, a payments solution provider partnered with Binance’s Binance Pay to launch a regulated and approved crypto payments service offering in the Kingdom.

The Kingdom of Saudi Arabia crypto traders and investors are growing despite the ban on cryptocurrencies and the Central Bank of Saudi Arabia has created a division to study implementation of virtual assets and CBDCs. In 2022, Qatar announced the introduction of its blockchain blueprint for the country.

So while regulations are essential for the growth of crypto ecosystem, and the UAE is leading in this regards, it doesn’t mean that crypto is not being utilized in other countries regardless of their regulatory status. 

Dubai’s virtual asset regulator gets its first CEO as it releases its final crypto framework

Dubai’s virtual asset regulator gets its first CEO as it releases its final crypto framework

On the LinkedIn page of Henson Orser, it states that he is the CEO (Chief executive Officer) of Dubai’s virtual asset regulatory authority better known as VARA as of January 2023. This comes as VARA reveals its final crypto framework in the next few weeks.  Previously Orser had held the position of President and Acting CEO of Komainu and was the Co Head of Global markets for Japanese digital bank Nomura.

As most know, VARA was created in March 2022 to regulate the virtual assets ecosystem and grant blockchain and crypto licenses in Dubai. A graduate of Princeton University, Orser is VARA’s first CEO.  Orser is well versed on digital assets, and custody solutions given his former role at Komainu. It is noteworthy that Komainu is one of the few Blockchain enabled DeFi custodians with a presence in Dubai that has been granted an MVP (Minimum Viable Product) license. The only other one is HEX Trust.

While VARA’s website has yet to note the new appointment, in an interview with the Block crypto, Orser stated, “VARA is the first purely virtual asset regulatory authority that is gold standard, tier one and even passportable to other jurisdictions.” He also notes it is compliant with the crypto regulation published by the Financial Action Task Force.

VARA is currently preparing for its MVP phase to allow for approved licensees to fulfill the pre-conditions required to operate. This means that MVP licensees are not allowed to provide any regulated services until VARA’s operationalization of the MVP Phase.

Orser clarified to LaraontheBlock, ” The provisional license during the MVP phase allows for firms to get office space and apply for VISAs etc. They won’t be able to commence operations until final rules and licensing.” 

Orser told The Block crypto that finalized rulebooks for crypto firms will be published on VARA’s website “within weeks.”

In December 2022, Laraontheblock wrote about an article on Pinsentmasons legal firm website which discussed Dubai VARA’s Full market product regulatory regime for virtual assets upcoming rollout. The legal expert Tom Bicknell stated in the piece that after VARA’s roll out of its minimum viable product license regime which allowed participants to undertake their activities within an agreed limited scope and specifically to their authorized market segment, VARA would soon be launching its FMP framework which will seek to monitor global trends of the virtual industry and where appropriate issue further rules and guidance

VARA had granted Binance, and FTX MVP licenses, however FTX’s license was later suspended and revoked after its downfall.

Dubai’s Virtual Assets Regulatory Authority (VARA) was also the first regulator to enter the Metaverse with the establishment of its Metaverse HQ in  ‘The Sandbox’.

Dubai virtual asset regulator to release its Full market framework soon

Dubai virtual asset regulator to release its Full market framework soon

In a recent article on Pinsentmasons legal firm website, the article discusses Dubai VARA’s Full market product regulatory regime for virtual assets and its upcoming rollout.

The legal expert Tom Bicknell states, that after VARA’s roll out of its minimum viable product license regime which allowed participants to undertake their activities within an agreed limited scope and specifically to their authorized market segment, VARA will soon be launching its FMP framework which will seek to monitor global trends of the virtual industry and where appropriate issue further rules and guidance

Tom Bicknell of Pinsent Masons states, “Encompassing the learning’s from its MVP licensing stage and widespread industry engagement, VARA’s introduction of the FMP ( Full Market Product) license will serve as a firm footing for the next stage of growth for the UAE’s leading virtual asset industry.”

Once the rollout begins, MVP license holders and other VASPs will have to apply for an FMP license to undertake their activities in the market. The FMP regime is structured around ensuring that anti-money laundering and combating the financing of terrorism (AML/CFT) compliance standards are met in accordance with the Financial Action Taskforce’s recommendations for VASPs. VARA said the FMP regime will also apply ongoing internal controls, corporate governance and conduct of business rules appropriate to the risk profile of the applicant.

Bicknell adds, “VARA is undertaking engagement and consultation with market participants as part of its development of the FMP framework with a version of the framework expected to be released shortly. It is worth noting that VARA has made clear that, notwithstanding the release of the FMP framework, the regulator will seek to monitor global trends of the virtual industry and where appropriate issue further rules and guidance.”

Does Q9 Capital crypto investment platform have a provisional approval from Dubai’s virtual asset regulator? Don’t think so

Does Q9 Capital crypto investment platform have a provisional approval from Dubai’s virtual asset regulator? Don’t think so

On October 27th 2022, Q9 Capital published a press release where they unilaterally announced that they had received a provisional virtual asset approval from Dubai’s Virtual Asset Regulatory Authority (VARA). LaraontheBlock since then has continuously been checking VARA’s website and no Q9 to be seen anywhere. Q9 is a crypto investment management platform offering capabilities to crypto and TradFi firms. So it should be on VARA’s website under TradFi, DeFi Asset Managers section, but it isn’t.

VARA lists all the entities which have applied for a license and have provisional approval. So for example on VARA’s website under Native Crypto Exchanges, users can see Binance [Issued MVP Licence], BitOasis, Bybit, CoinMENA, Crypto.com, FTX Exchange FZE [Suspended MVP License], GCEX, Huobi, MidChains and OKX.

Then under TradFi DeFi Custodians, you have the recently approved Hex Trust [Issued MVP Licence], Komainu [Issued MVP Licence] and then you have those who applied and have a provisionary license but not a full MVP one that include Monstera and Zamp.

In TradFi | DeFi Asset Managers there is Brevan Howard, Fintonia Group, NineBlocks and NOIA Capital. While under TradFi | DeFi Financial Services you have Amber Group, Equiti, Scallop, and TPS Capital

With Native Crypto-Content | DLT Platforms listed are Calvin Cheng Web3.0 Holdings and Woonkly Labs while in TradEcon | DeFi Services there is BRE Holdings, Eros Investments, Hike, and Prypto

Two weeks since the announcement and no Q9. This is despite the fact that VARA is quick to update its website when it has approved or provided preliminary approvals or MVP licenses. In addition in many cases it also publishes a press release.

Q9 had stated that this approval came as it expanded into the UAE and applied for a full operating license in accordance with VARA requirements.  As per the release, Q9 products and strategies can be created and executed on Q9’s platform, such as systematic investment portfolios and white-labeled offerings, within VARA’s framework and distributed globally in an automated, transparent, regulated and compliant manner.

The release added, the full operating license, once received, will allow Q9 to extend products and services to qualified investors and financial service providers. Q9 will also establish a regional hub in Dubai to contribute to developing the ever-expanding virtual asset ecosystem both in Dubai and globally.

The press release even goes on to say that the provisional approval is a major milestone that follows a number of registrations for Q9’s local entities in Hong Kong and Dubai. As a regulation-led platform with robust compliance and security controls that have consumer protection and market integrity at its core, the registration further strengthens Q9’s position.

James Quinn, Managing Partner of Q9, noted “Dubai’s Virtual Assets Regulatory Authority is a testament to the country’s forward-looking stance on digital assets and its willingness to support the industry through collaboration. We look forward to participating in the authority’s robust compliance framework and continue building partnerships as we expand our presence in Dubai to roll out additional services and enhanced products for the region.”

But until LaraontheBlock, sees the Q9 name on VARA’s website, Q9 ‘s provisional preliminary approval is still hanging in the wind!

Another crypto custodian gets licensed by Dubai’s VARA regulator

Another crypto custodian gets licensed by Dubai’s VARA regulator

Dubai’s regulator is currently pushing forth its crypto custodial licenses. Last week VARA ( Dubai Virtual Asset Regulatory Authority) provided Komainu DeFi, digital asset custodian with a provisionary license and today it has provided Hex Trust, fully licensed and insured provider of bank-grade custody and associated services for digital assets a Minimum Viable Product (MVP) license. 

The MVP license will allow Hex Trust to provide a wide range of virtual asset services to institutional clients and sophisticated investors] in Dubai within its framework for virtual asset service providers (VASPs). The range of services Hex Trust can now provide includes Virtual Assets custodial services, Broker-Dealer Services and Staking Services. 

 Hex Trust opened its Dubai office in June 2022, which is run by Filippo Buzzi, and serves as its headquarters for the MENA region.

Filippo Buzzi, Regional Director MENA of Hex Trust, commented, “Becoming one of the first virtual asset companies and custodian to receive the license is a big step for Hex Trust as we establish ourselves in the MENA region. We recognize the enormous potential this region has to build one of the leading virtual asset hubs in the world. Hex Trust looks forward to expanding our client base in Dubai following the license approval and making a positive contribution to the VA ecosystem in the region. 

Alessio Quaglini, cofounder and CEO of Hex Trust, commented, “From day one, Hex Trust was built to follow the strictest compliance policies and adhere to regulatory standards across the main jurisdictions. Being amongst the first companies to be granted the MVP is exciting, given the enormous potential of the sector in Dubai.”

DeFi crypto custodian Komainu receives MVP license from Dubai virtual asset regulator

DeFi crypto custodian Komainu receives MVP license from Dubai virtual asset regulator

Komainu, listed on VARA website as a DeFi (Decentralized Finance) digital asset custodian has received its minimum viable product license from Dubai’s Virtual Assets Regulatory Authority (VARA). This is following the issuance of its provisional approval in July 2022. This is a interesting development given the recent FTX scandal and the migration of crypto wallets from centralized exchanges to self custody.

Komainu can now offer an approved range of virtual asset related services to institutional investors in Dubai within an internationally benchmarked legislative framework for virtual asset service providers (VASPs) following completion of its readiness requirements.

The transition to an MVP license, from a provisional approval received earlier this year, means the firm can provide institutional clients in the UAE with Virtual Assets Custodial Services and Virtual Assets Management Services.

Komainu MEA is the first ‘dedicated’ institutional digital asset custodian to receive its MVP license approval from VARA.

Helal Saeed Al-Marri, chairman of VARA stated, “In this current phase of heightened global appreciation for responsible virtual asset participant, VARA is pleased to on board our first tradFi VASP Komainu to join the MVP phase of the regulatory regime. Participation from the VA specialist ventures of deeply respected global financial institutions, allows VARA the opportunity to structure interoperable guidelines and risk mitigation levers for secure market operations.”

Nicolas Bertrand, CEO of Komainu, commented: “Komainu actively works with regulators, partners, and our clients to make sure that our platform and the overall industry is held to the highest of standards to facilitate the wide adoption of virtual assets by institutions. With the full MVP license now granted by VARA, we look forward to launching our services in the MEA region and assist institutions gain exposure to virtual assets, whilst relying to secure and regulated virtual asset custody services.”

Komainu’s CEO is currently attending the AIM Investment Summit in Dubai UAE.

Dubai’s Virtual Asset Regulatory Authority to look into impact of FTX exposure in local market

Dubai’s Virtual Asset Regulatory Authority to look into impact of FTX exposure in local market

Dubai’s Virtual Asset regulatory Authority (VARA) has issued a statement with regards to FTX exchange. It reiterates that is has revoked the approval of FTX license as well as suspended its MVP License. As per the market notification, while FTX MENA had not commence local operations, VARA will be looking into the impact of FTX on domestic market exposure not limited to FTX MENA

As per the statement, On November 11, 2022, one hundred and thirty-four [134] entities related to, and including, FTX Trading Ltd., FTX Exchange FZE, and Alameda Research [Bahamas] Ltd. [collectively, the “Debtors”] filed a petition in the U.S. Bankruptcy Court for the District of Delaware for relief under Title 11 of the United States Code.

FTX Exchange FZE [FTX MENA], one of the aforementioned entities, had received approval from VARA for a Minimum Viable Product [MVP] licence on 15-Jul-2022 – the Approval was revoked as of 10-Nov-2022 and the Licence stands suspended in consequence.

FTX MENA was in the readiness preparatory phase and had not received VARA approval to commence operations, on board clients or service the market in the MVP Phase of the regulatory regime. Client Money Account with a domestic bank account had also not been secured – which is a pre-requisite for VARA to authorise any VASP operations in the UAE.

As such, the FTX MENA is confirmed to have no client exposure.

Further, in line with VARA’s principles of mitigating market and investor risk, all Virtual Asset Service Providers [VASPs] that have engaged with VARA to participate in Dubai’s regulated ecosystem, have been asked to provide disclosures to determine the severity of domestic market exposure, and contagion scale across the UAE. Details sought include:

·       Exposure to the FTX group of companies referenced in the 11-Nov-2022 bankruptcy filing, including holdings of the FTT token and any other assets

·       Nature and risk of the exposure; alongside the scale/magnitude; and impact/severity and manageability;

·       UAE residents that are impacted, including number of users and magnitude of exposure – both retail and institutional clients [not limited to FTX MENA];

Detailed action plans to mitigate the exposure highlighted above.

Following receipt of the information, VARA will publish a summary closure statement on impact within the VARA Regime. 

VARA also published the following statement, ” The MVP Phase is in its readiness preparatory stage to allow for approved licensees to fulfil all pre-conditions required to undertake MVP market operations within the VARA Regime. As such, no MVP licensees are permitted to provide any regulated services/activities to their specifically authorized market segment(s) until after VARA’s operationalization of the MVP Phase. VARA is following a developing matter involving the potential insolvency, and alleged fraudulent behavior of an affiliate of a Virtual Assets Service Provider (VASP) licensed for participation in the MVP Phase. The situation has been, and will continue to remain closely monitored for latest updates to ensure that timely and substantive actions are taken within the Emirate of Dubai to protect investors and all market participants, backed by active enforcement of regulatory requirements relating to custody and segregation of client money; insurance and liquidity cover; and in general all aspects pertaining to market abuse prevention.”

It is obvious that while FTX MENA had not commenced operations, there were a number of entities and individuals utilizing FTX international platform. This is well noted given that the MENA region was the third biggest revenue generator for FTX not in terms of number of customers but in terms of volume of trades. 

UAE VARA regulator suspends FTX Crypto Exchange license in a region that was its third biggest revenue base globally

UAE VARA regulator suspends FTX Crypto Exchange license in a region that was its third biggest revenue base globally

As the FTX debacle unfolds and FTX files for bankruptcy, CEO steps down, UAE VARA ( Virtual Asset Regulatory Authority) in Dubai has suspended FTX’s license. FTX MENA users brought in high revenues for FTX as it was considered as the third biggest revenue region for FTX. 

While the crypto markets are in turmoil across the globe, it will also have an effect on the MENA region. FTX MENA CEO Balsam Danhach told Reuters in a previous interview,  “Our license expands to retail customers as well, however, it will be a gradual scale up to ensure that we approach the retail market within the guidelines set by the Virtual Assets Regulatory Authority.”

Danhach also told zawya in a recent interview that their operation in MENA region is the second to third region in terms of global revenue performance. At the time FTX had 6 million users with a trading volume of $12 billion per day.

He stated in his interview with Zawya, talking about MENA and the importance of their license in UAE, “We are not talking about a region contributing a small percentage to our revenues but a region which is among our top three in terms of revenues. Here there are higher volumes per user.”

While FTX officially launched in UAE on October 31st 2022, its CEO had commented that from July 2022 until October FTX was testing backend migration of their existing user base from MENA onto their FTX MENA platform. FTX was offering the same access to all the services offered globally through the local FTX page. He stated at the time, “We are working on trading in UAE dirhams and accessing local banks.”

FTX MENA replying to a post on LinkedIn stated that they had not actually commenced operations locally. ” FTX MENA would like to clarify that the announcement of receiving its MVP License indicates that we are only able to commence readiness measures. Rigorous pre-conditions set by VARA have to be met by FTX MENA before undertaking any active market operations in the UAE. FTX MENA confirms that we are still in the readiness preparation phase and have hence not onboarded any clients nor engaged in any active operations locally as we have not received VARA approval to do so.” 

FTX Exchange, was the first Virtual Asset Service Provider (#VASP) to receive the MVP license to operate its virtual asset (VA) exchange and clearing house services from Dubai’s Virtual Assets Regulatory Authority (VARA).

Given the comments made by FTX MENA CEO,  it seems that there will be an effect on a number of crypto traders in the region. What could be worrisome is how will this play into the crypto growth in the region, and UAE’s stance on crypto and crypto regulation.