New crypto broker license on the way for DKK partners with initial approval from Dubai VARA

New crypto broker license on the way for DKK partners with initial approval from Dubai VARA

DKK Partners FZE, subsidiary of DKK Partners a fintech company, has announced that it has been granted an initial approval by the Dubai Virtual Assets Regulatory Authority (VARA) for crypto brokerage dealer services.

DKK Partners FZE will continue to work towards acquiring a full Virtual Asset Service Provider crypto broker license from VARA.

The VARA initial approval allows DKK FZE to move forward in the licensing process as they look to offer corporate and institutional customers in Dubai and the UAE access to stablecoin blockchain technology, utilizing USDT and USDC.

Khalid Talukder, Co-Founder and CEO of DKK Partners, stated, “It is an incredibly exciting time for DKK in the Middle East and securing the VARA Initial approval will enable us to continue making a splash in the region. Our expansion to Dubai last year was a huge success and we’re looking to extend our influence in the market by strengthening our compliance and innovation in the Virtual Asset space. This license is a game-changer for DKK and the digital asset landscape in Dubai empowering businesses to confidently engage in blockchain technology, benefiting from the stability of stablecoins and the regulatory framework.”

Victoria Albergini, Head of Partnerships for DKK Partners FZE in Dubai added, “Since our launch last year, DKK Dubai has gone from strength to strength and is now in a prime position in the rapidly evolving digital asset landscape. The VARA initial approval enhances our ability to serve the unique needs of corporate and institutional customers.”

Dubai virtual asset regulator grants initial approval to B2B Prime

Dubai virtual asset regulator grants initial approval to B2B Prime

It seems like almost every week or so new virtual asset service providers are seeking licenses in Dubai UAE. The latest already regulated in Cyprus and Mauritius, is B2 Prime Group. Its MENA entity, B2B Prime Digital MEA has been granted initial approval for a crypto broker, crypto exchange, payment and transfer license from VARA (Dubai Virtual asset regulatory Authority).

As per the press release, licensing remains subject to fulfillment of pre-operating conditions and qualifying for operational approval by VARA.

This milestone signifies the granting of Initial approvals from VARA for licenses covering activities of “Virtual Asset Exchange Services,” “Virtual Asset Broker Dealer Services,” and “Virtual Asset Transfer and Settlement Services”.

Eugenia Mykuliak, Founder of B2Prime, expressed her gratitude for this achievement, stating, “We are excited to contribute to the growth of Dubai’s ever growing Virtual assets ecosystem.”

Arthur Azizov, Co-Founder of B2B Prime Digital MENA added, “We are extremely proud and grateful to have received initial approval from VARA, which is a testament to our determination to maintain the highest standards in regulatory compliance.”We’ve built a powerful ecosystem that not only meets but exceeds the industry’s standards, guaranteeing a safe and efficient gateway to virtual assets for users. We are ready to move forward in the licensing process in our bid to offer secure and streamlined access to virtual assets, strictly adhering to VARA’s guidelines.”

“The receipt of the Initial Approval for all three licenses, particularly the Transfer and Settlement License, was eagerly awaited and has brought immense joy to our entire team. This achievement has undoubtedly inspired us to pour our absolute best towards securing the Virtual Asset Service Provider license”, stated Adriana Paredes Herrera, CEO of B2B Prime Digital MENA.

B2Prime Group, a Prime of Prime Multi-Asset Liquidity Provider, serves institutional and professional clients globally and offers compliant, reliable expertise across Forex, Crypto CFDs, and other markets.

UAE freezone regulator toughens up on AML/TFS policies

UAE freezone regulator toughens up on AML/TFS policies

Regulatory arm of Financial Free zone ADGM tells registered companies in ADGM that they have to adhere to the AML ( Anti money laundering) TFS ( targeted Financial sanctions) legislations and policies of the UAE Federal government. What this means is that even if companies have registered in ADGM as offshore or freezone entities they will still be legally bound to the UAE AML/TFS legislations which also include virtual assets.

The FSRA announced these  revisions that clarify the requirements that previously appeared in the AML Rulebook, reflecting the federal regulatory framework the UAE has put in place to combat money-laundering, the financing of terrorism and proliferation financing and ensure compliance with targeted financial sanctions. In particular, minor drafting changes have been made to the provisions relating to wire transfers in order to provide greater clarity that the FATF “Travel Rule” applies to Virtual Assets.

The revisions will be relevant to all firms subject to the provisions in the AML Rulebook, including authorized firms in the financial services sector and Designated Non-Financial Businesses and Professions.

The amended AML Rulebook, as per FSRA ( Financial Services and Regulatory Authority) of ADGM asserts that “ The AML Rulebook is made in recognition of the application of the Federal AML Legislation in the Abu Dhabi Global Market (“ADGM”) of the Federal AML Legislation. Nothing in the AML Rulebook affects the operation of Federal AML Legislation.”

A Relevant Person’s Governing Body is responsible for establishing, maintaining and monitoring the Relevant Person’s AML/TFS policies, procedures, systems and controls and compliance with applicable AML legislationthe AML Rulebook, the Financial Services and Markets Regulations 2015 (“FSMR”), and all applicable Federal AML Legislation.

The FSRA in its amended rule book clearly states, “ Federal AML Legislation applies in the ADGM.”

According to FSRA,  the definition of Federal AML Legislation is broad. It includes all federal legislation as may be in force relating to money laundering, terrorist financing, proliferation financing, the financing of unlawful organizations and sanctions compliance including Targeted Financial Sanctions. Particular pieces of legislation to be aware of include:

(a) Federal Law No. (7) of 2014 regarding Combatting Terrorism Offences;

(b) Federal Decree Law No. (20) of 2018 on Anti-Money Laundering, Combatting the Financing of Terrorism and Financing of Illegal Organisations;

Cabinet Decision No. (10) of 2019 concerning the Implementing Regulation of Decree Law No. (20) of 2018;

(d) Cabinet Decision No. (74) of 2020 concerning the Terrorism Lists Regulation and Implementation of UN Security Council Resolutions on the Suppression and Combatting of Terrorism, Terrorist Financing, Countering the Proliferation of Weapons of Mass Destruction and its Financing and Relevant Resolutions.

In addition FSRA has made it clear that it will hold the governing body and senior management of a registered entity as responsible for compliance with AML rulebook.

FSRA adds, that the Regulator expects the RBA (Risk Based Approach) to determine the breadth and depth of the Customer Due Diligence (“CDD”).

The same regulations apply when it comes to Sanctions. These UNSC obligations Targeted Financial Sanctions (“TFS”) are Sanctions issued by the UNSC or the U.A.E. involving asset freezing and other financial prohibitions targeted at individuals, entities or groups with the aim of combatting terrorism and terrorist financing, and countering the proliferation of WMD.

This also applies for FATF.

UAE AML,CTF office cooperates with Kazakhstan on virtual assets

UAE AML,CTF office cooperates with Kazakhstan on virtual assets

UAE Executive Office of Anti-Money Laundering and Counter Terrorism Financing (EO AML/CTF) and the Financial Monitoring Agency of the Republic of Kazakhstan (FMA) signed a Memorandum of Understanding (MOU)  to enhance bilateral cooperation in the combatting of financial crimes with focus on virtual assets, public-private partnership (PPP), education and capacity building, and asset recovery.

Knowledge sharing will cover virtual assets, with both parties committed to improving regional and local understanding of the risks associated with ML/TF/PF related to virtual assets. It will also include public-private partnership initiatives with the counterparties agreeing to collaborate on the establishment of rules to exchange strategic and operational information between the public and private sectors to prevent and combat money laundering and terrorism financing risks.

Hamid AlZaabi, Director General of the EO AML/CTF, remarked that the signing of the MoU formalizes the commitment made by both countries to protect the integrity of the global financial system. “Effective strategic engagement and cooperation with international counterparties is essential in the fight against financial crime and is central to the UAE’s strategy. The signing of this Memorandum with the FMA in Kazakhstan is significant and comes at a time when the EO AML/CTF is working to strengthen its collaboration efforts with international partners over the long-term. We have decided to focus on four key areas to ensure that our coordination is targeted, allowing us to make a real impact in addressing the most pressing issues in AML/CFT today.”

Zhanat Elimanov, Chairman of the FMA, welcomed to MoU, and said, “This year the relationship between our countries in the AML/CFT field has reached a new level. We have managed to establish an effective exchange of strategic and operational information. This has contributed to the successful investigation of major cases on money laundering committed in our country. We are inspired by UAE’s achievements in implementing IT solutions in AML activities. With great respect, we will adopt this experience”.

UAE to apply IMF New draft methodology for virtual assets

UAE to apply IMF New draft methodology for virtual assets

IMF discussed its new draft methodology for the supervision of virtual assets during a recent fintech roundtable organized by the International Monetary Fund (IMF) staff, in collaboration with the UAE Executive Office of Anti-Money Laundering and Counter Terrorism Financing. Interestingly the methodology project was financed by a number of countries including Qatar and Saudi Arabia.

In attendance were participants from 15 countries including Bahrain and Saudi Arabia.

Hamid Al Zaabi, Director-General of the EO AMLCTF, stated, “The UAE continues to raise the effectiveness of its regulatory framework for VAs and VASPs to attract innovative firms and keep out illicit actors seeking to exploit the global financial system. We are delighted to partner with the IMF team to give supervisory authorities across the world the opportunity to strengthen international cooperation and be part of the design process of an important new methodology for VA/VASP supervision”.

Chady El Khoury, Deputy-Division Chief of the Financial Integrity Group within the Legal Department at the IMF, noted the broad consensus among participants on the need for urgent actions to mitigate the potentially significant ML/TF risks emerging from VA and VASPs.

He explained, “It is critically important that countries carry out robust AML/CFT risk-based supervision of VASPs, and that assessing the associated ML/TF risks is the starting point of an effective AML/CFT supervisory regime.”

Participants at the workshop identified a range of issues, including a lack of capacity and resources for supervisory agencies and data collection/analysis gaps. They agreed on the need for strong collaboration among AML/CFT supervisory agencies and upgrading existing ML/TF supervisory risk assessment models to accurately assess VA and VASPs.

In the absence of a clear solution to deal with data collection and related gaps, supervisors may need to rely on models that are more tuned into the inherent risks that VASPs pose with the decision on whether to incorporate data (e.g., transaction level analysis on VA flows) on a case-by-case basis. Finally, a more connected and active community for collaboration between AML/CFT VA and VASP supervisors would help countries to better understand and address cross-border ML/TF risks.

Over the coming months, IMF staff will follow up with participants and incorporate feedback on the methodology. Once finalised, the methodology will form part of the Legal Department of the IMF’s CD toolkit that the organisation will start providing to countries by mid-year 2025.

The methodology was developed under a project that is financed by a donor-supported Canada, France, Germany, Japan, Korea, Luxembourg, the Netherlands, Qatar, Saudi Arabia and Switzerland trust fund to finance CD in AML/CFT at the IMF with excellent support from the UAE to host the event.

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.

Wio bank customers can trade crypto, Bitcoin, and Ethereum using UAE Fuze digital assets infrastructure

Wio bank customers can trade crypto, Bitcoin, and Ethereum using UAE Fuze digital assets infrastructure

UAE digital assets infrastructure provider Fuze has partnered with Abu Dhabi headquartered Wio Bank to empower its customers with virtual assets trading services.

Customers will be able to buy and sell popular cryptocurrencies such as Bitcoin and Ethereum, directly through Wio Bank’s recently launched application, Wio Personal.

Wio Personal is an intelligent everyday banking application redefining the way individuals see, manage, and grow their money. The personal banking application allows all customers to start investing simply and effortlessly. Wio Personal users can access thousands of global stocks, ETFs, fractional shares and even UAE IPOs seamlessly in a single, integrated app.

Speaking about the significance of the partnership, Jayesh Patel, CEO of Wio Bank PJSC, said, “The region is emerging as an important hub for cryptocurrency and there is a demand from customers for convenient, seamless access to crypto trading services integrated within their daily banking apps. As a business that was created to catalyze the digital banking ecosystem, we are excited at the opportunities this collaboration with Fuze provides, to better serve our customers and support the UAE’s forward-thinking transformation of the financial services sector. Fuze mirrors our own robust governance, compliance, and risk capabilities, so our customers can be confident in having secure access to Virtual Assets.”

Mohammed Ali Yusuf (Mo Ali Yusuf), Co-Founder and CEO of Fuze, added, “As a regulated provider, we are proud to partner with Wio Bank, which has already made tremendous strides in redefining banking for the modern era across the region. There is a clear synergy with our mission to build the future of finance and we look forward to supporting Wio Bank in delivering regulated, trusted crypto services to its flourishing customer base.”

In a recent UAE poll suggested 48% of crypto users lacked trust in crypto exchanges. Through such partnerships, neobanks can provide regulated options for their customers and help to increase trust in the crypto ecosystem.

Abu Dhabi regulator in 2024 to amend virtual asset regulations and introduce DeFi regulations

Abu Dhabi regulator in 2024 to amend virtual asset regulations and introduce DeFi regulations

The Abu Dhabi financial free zone hub, ADGM (Abu Dhabi Global Market) and its regulatory body the FSRA (Financial Services regulatory Authority) have published their business plan for 2024 which outlines introducing DeFi regulations as well as amendments to its virtual assets regulatory framework.

ADGM which announced its virtual assets framework back in 2018 has since then been growing its framework most recently announcing its DLT Foundation regulations that would allow the issuance of governance tokens.

But more interestingly in its newly published business plan for 2024, the ADGM FSRA states, they are developing a framework for DeFi activities in 2024. ADGM business plan states, “The current focus for the FSRA has been on admitting decentralized finance (DeFi) solutions to the RegLab so that it can learn from the experiences of these companies and thereby take steps to develop a suitable regulatory framework for DeFi activities.”

Together, the RegLab and Digital Lab showcase how effective government led initiatives can advance the local ecosystem and be drivers of a business friendly environment.

ADGM and FSRA will also work to utilize AI (Artificial Intelligence)  and has engaged with several projects that leverage this technology, as well as to provide more interactive and chatstyle ‘Regulation as a Service.

In terms of its virtual assets framework while the FSRA has continued to refine and enhance its VA framework and in September 2022 published an update of the ‘Guiding Principles for the Financial Services Regulatory Authority’s Approach to Virtual Asset Regulation and Supervision’ on its approach to VA regulation and supervision, in 2024 the FSRA will review its regulatory framework for VAs to assess whether any enhancements are necessary. As stated in business plan,” This goes back to the FSRA’s experience gained from supervising VA businesses and the emergence of new VA regulatory frameworks introduced in relevant peer jurisdictions.”

Finally the FSRA is working with FinTech business models that can promote greater liquidity and financial inclusion in private capital markets using as well FSRA’s regulations that support the adoption of digital assets and tokenized securities which have enabled greater accessibility and transferability of private capital market investments.

So In 2024 the UAE and in particular Abu Dhabi will witness advancements in the virtual assets regulatory landscape, as well as introduction of DeFi regulations and more utilization of security tokens and digital assets for investments.

Those who have been following ADGM know that already Binance has gained a license, as has Bahrain headquartered RAIN exchange, and most recently IOTA announced it was launching its DLT Foundation from ADGM Abu Dhabi.

This article was first published in Cryptopolitan

UAE home grown Fuze Finance receives license from Dubai virtual asset regulator

UAE home grown Fuze Finance receives license from Dubai virtual asset regulator

UAE based Fuze Finance under the licensed name Morpheus Software Technology (FUZE) FZE has just received a full VASP license from Dubai’s Virtual asset regulatory Authority. Fuze offers embedded digital asset capabilities for financial institutions as a digital asset infrastructure provider for the Middle East.

VARA’s license will allow Fuze Finance to offer broker dealer services, allowing them to serve institutional investors, retail and qualified investors. Through this licence, the business will be able to serve customers through two core service lines: firstly, via digital assets as a service (DAAS) enabling banks, fintechs and enterprises to integrate B2B2C digital asset products natively into their channels and secondly, through a regulated Over-The-Counter (OTC) service providing investors with a technology-first option for executing institutional-level digital asset trading with ease and efficiency.

With a regional digital asset market worth $566bn, and growing at 48% YoY, Fuze co-founder and CEO, Mohammed Ali Yusuf believes the Middle East is the perfect home to establish a digital assets infrastructure business.

Ali Yufu on receiving the license noted, “We thank VARA for assessing and approving our licence. VARA’s comprehensive and consultative process demonstrates the robust framework at the heart of this booming industry. Across the UAE, digital assets businesses are being welcomed to a thriving ecosystem with regulation that matches rapid innovation and adoption. Businesses can now have full confidence in the regulated infrastructure that Fuze provides, as we support the world’s fastest-growing digital assets hub.”

In September 2023 UAE headquartered Fuze Finance, raised a seed round of $14mn, the largest Seed investment in a digital assets startup in the history of the Middle East and North Africa region (MENA). The investment was led by Abu Dhabi-based Further Ventures, along with participation by US-based Liberty City Ventures.

Fuze wanted to benefit from the strategic capital and network of these investors, acting as a catalyst for the business as it builds the digital asset infrastructure that will drive the future of finance.  A first-of-its-kind infrastructure provider in MENA, Fuze enables any bank, fintech or traditional enterprise to easily offer regulated digital assets products to their customers through their native apps.

Fuze was founded by an expert team of fintech, traditional finance (TradFi) and decentralized finance (DeFi) leaders, with its co-founders holding extensive knowledge from experience in global hypergrowth businesses.

CEO, Mohammed Ali Yusuf (Mo Ali Yusuf) has held prominent roles at Checkout.com and Visa; Arpit Mehta (COO) was previously in the leadership team at fintech leaders like Simpl and Clear; Srijan Shetty (CTO) built algorithmic trading systems at Goldman Sachs and worked at tech leader Microsoft.

Yusuf at the time of raise stated, “We are excited to build the future of regulated financial infrastructure and digital assets out of the UAE. Regulations have played a pivotal role in propelling the UAE into a central position within the global Digital Assets industry. To receive the backing of Abu Dhabi-headquartered Further Ventures combined with the deep expertise of US-based Liberty City Ventures, confirms the relevancy and potential of Fuze’s mission to rapidly expand our cutting-edge infrastructure across the region.”

Article updated on November 20th 2023

Dubai virtual assets regulator appoints new CEO amid intensified regulatory efforts

Dubai virtual assets regulator appoints new CEO amid intensified regulatory efforts

Dubai’s Virtual Assets Regulatory Authority (VARA) in a press release has announced that Mathew White will be the new CEO of VARA which comes as VARA intensifies its efforts towards regulating the VASPs in Dubai calling on them to finalize their applications today.

As per the press release, Matthew White has 20 years of experience in technology, cyber security and digital trust while working as a partner at PricewaterhouseCoopers. Former CEO Henson Orser who is leaving to pursue other opportunities will remain fully engaged to support the new CEO as he integrates into his new role.

In a Bloomberg article it noted that VARA is poised to levy fines on over a dozen crypto firms, as the head of Dubai’s crypto regulator is poised to depart after less than a year on the job.

The news comes as VARA calls on more than 1000 legacy firms to complete their applications to register under Dubai’s unique regulatory framework by November 17th 2023, as part of Dubai’s commitment to fostering a transparent and resilient virtual asset environment.

VARA is calling on VASPs that have yet to submit the applications, have missed the notifications from their commercial licensing authorities, or have submitted incomplete forms to proactively get in touch, to avoid unintended regulatory consequences.

It seems with new VARA CEO efforts will be focused on ensuring compliance to regulatory and FATF requirements by VASPs.