UAE HayVN wants to buy FTX Pay because of its strong relationships, are they serious?

UAE HayVN wants to buy FTX Pay because of its strong relationships, are they serious?

It is all over the news that UAE HayVN, regulated virtual asset trading platform is considering to bid for FTX Pay, FTX crypto exchange’s payment business. The reason the CEO of HayVN gives is that FTX Pay is valuable because of its relationships with establish companies such as MasterCard. Well is that a valid reason, given that most of these established companies have severed their relationships with FTX Pay, while it is actually Visa that was a partner and not MasterCard.

UAE National newspaper came out with a story that UAE HayVN regulated by ADGM is interested in purchasing FTX Pay  to integrate it with HayVN Pay infrastructure according to statements made by Christopher Flinos, co-founder and chief executive of Hayvn.

As he told the UAE National, “We are pleased to learn that some of the FTX businesses have solvent balance sheets, responsible management and valuable franchises. We are open to a discussion with their bankers, Perella Weinberg, as soon as they have the court’s approval to proceed.”

FTX Pay is an application that allows merchants to accept both cryptocurrency and fiat payments for a flat 1 per cent transaction fee with no minimum or upfront costs, according to its website.

In the interview Flinos did not disclose the amount Hayvn was willing to pay for FTX’s payments business, but said its plan to bid for the company had been approved by the Hayvn board and “back-channel discussions” had begun to indicate their interest. “It will be a public process but we want to be more ahead of the others for when that drops.”

Flinos believes FTX Pay is valuable because of its relationships with established companies such as Mastercard. He states, “From the advisers’ perspective, they want to know that the bidders have got money; tick, we have got money. They want to know that the bidders have got a good business; tick, we have got a good business, we are regulated, we have a game plan, we can value it [and] we know what it is worth to us. Because Sam Bankman-Fried had such a strong presence as an individual and was the darling of the industry, then companies like MasterCard had arrangements with FTX Pay.”

He adds “I am basically not buying it for its tech, as we have got better tech. I am buying it for the relationships that it has and the presence that it has with these people, so it is less risky.”

Hayvn Pay is a regulated financial network for blockchain-based currencies and works with UAE companies such as DAMAC Properties, developer Nakheel and the Dubai government, allowing people to buy property using cryptocurrency.  Earlier Hayvn had partnered with WooCommerce, an open source, e-commerce platform.

The CEO notes, “Acquiring FTX Pay will help solidify our position as the global leader in cryptocurrency payment solutions.”

But does HayVN know that VISA severed this relationship in the aftermath of FTX debacle and fall?

Yes, VISA had teamed up global crypto exchange FTX to offer debit cards in 40 countries with a focus on Latin America, Asia and Europe. But Visa terminated this partnership and their global agreements with FTX as well as their U.S. debit card program which is being wound down by their issuer.

Other companies have sought to distance themselves from FTX, such as BitPay.  Even Stripe removed the press release on its website that talks about its partnership with FTX for seamless payment, as has Nuvei a company that provides on and off ramp payment services to FTX users.

As for Reddit it also had a partnership with FTX to integrate Reddit’s Community Points in the US, EU, Australia, and other global markets. The partnership featured the integration of FTX Pay as a white-label payment and exchange solution to support users onboarding Community Points, but is surely now also a thing of the past.

So where are the partnerships that were forged with FTX Pay and if you purchase FTX Pay does that mean that the former partnerships come to life again? If the purchase is not for the technology, but for the relationships, severed ones, will it be so easy to revive them?

I really don’t know why HayVN whose technology is as they say better than FTX’s, and which is regulated by UAE ADGM would want to get into the position of purchasing an unregulated, bankrupt and partner less  sub entity of FTX. Beats me

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 now has two crypto hubs and two blockchain crypto asset associations

UAE now has two crypto hubs and two blockchain crypto asset associations

The Abu Dhabi Finance Week witnessed a lot of announcements including Abu Dhabi Global Market (ADGM) crypto hub the second crypto hub in UAE after Dubai’s Digital Assets Business Group and the crypto center in Dubai Multi Commodities Centre DMCC in Dubai. 

As per the announcement, given the rapid emergence of new virtual assets such as cryptocurrencies and other related assets, ADGM is leading the way to introduce progressive frameworks and regulations around these technologies and developments.

The launch of “Abu Dhabi Crypto Hub” is therefore an important representation of the strategic initiatives taken by ADGM in support of economic diversification and the growing role of Abu Dhabi as a financial hub, addressing the current and future needs of the market through innovative technologies.

Crypto Abu Dhabi served as a vital platform to facilitate the assembly of the global crypto, blockchain and decentralized finance entities and elaborated on some of the most disruptive financial technology of our age, while also discussing and planning the long-term growth and development goals of an exciting, dynamic and forward-looking sector of the financial industry.

This also comes after Abu Dhabi launched its own Middle East, Africa & Asia Crypto & Blockchain Association (MEAACBA) backed as well by ADGM. As per the announcement it was seen as a pivotal step forward in the development of accessible, transparent, and compliant crypto-blockchain ecosystems.

The non-profit member-driven organization has cross-industry representation with a focus on education, coordination, and innovation for participants across the crypto and blockchain ecosystem.

  • Jehanzeb Awan (Chairman)
  • Richard Teng – Regional Head of MENA, Binance
  • Stuart Isted – GM, MEA, Crypto.com
  • Ola Doudin – CEO & Cofounder, BitOasis
  • Basil Al Askari – Co Founder and CEO, MidChains
  • Joseph Dallago – CEO and Co-Founder, Rain Financial
  • Dapo Ako – MD, J. Awan & Partners

Board Chairman, Jehanzeb Awan, stated “We are dedicated to educating the global community and helping all businesses succeed and thrive. This will be delivered by industry experts sharing knowledge through webinars, courses and events. The Association will also promote responsible innovation through its ‘Moon-shot’ lab to which all participants can contribute.”

Ahmed Jasim Al Zaabi, Chairman of ADGM, commented: “The decision by MEAACBA to incorporate in ADGM is a clear acknowledgment of the progressive regulations ADGM has built, to enable the development of technological innovation in crypto. We look forward to working closely with MEAACBA to support the development of crypto and blockchain ecosystems. We strongly believe that the Association will positively contribute towards bolstering Abu Dhabi and the UAE’s digital economy and adoption.”

MEAACBA membership is open to all companies and individuals across the Middle East, Asia, and Africa involved with the blockchain and crypto ecosystem, including exchanges, custodians, consulting firms, technology developers, digital asset traders, and NFT/ Metaverse firms.

Just two months prior, Dubai’s Digital Assets Business Group (D2A2) was launched by Dubai Chamber of Digital Economy. As per the announcement at the time, the group aimed to strengthen the digital asset industry’s role in the economic development of the UAE and the wider Middle East region, enhance digital business infrastructure and support the growth of digital companies in Dubai.

His Excellency Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications, Chairman of Dubai Chamber of Digital Economy, emphasized the formation of D2A2 as a strategic move aligned with Dubai Chamber of Digital Economy’s strategy, which aims to fast track the growth of Dubai’s digital economy.

D2A2 was touted to be an important reference providing strategic and up-to-date market research data related to the digital asset sector to industry stakeholders, the private sector, policymakers and government entities.

Gaurang Desai, Chairman of D2A2, said: “We see an opportunity to turn Dubai and the UAE into a regional hub for digital assets. That is why it is very important to work towards creating a bridge for the digital asset industry to further integrate into the world economy by cooperating with counterpart organizations across the world. We wish to welcome all experts in the industry to come and join D2A2, to help us spread the principles of accountability, integrity and transparency, and promote the highest professional and ethical standards. D2A2 will reinforce the digital asset industry’s commitment to society by educating the public and developing tools to bolster the access to and advancement of technology for all. It will also support the digital asset industry’s efforts to improve quality, the environment, and energy management and investor protection.”

So where does the Crypto Oasis ecosystem come in to all of this? It was the first ecosystem to be launched in the UAE to help promote blockchain and crypto companies and regulations. Ralf Gabischnig told LaraontheBlock, “We have just started to accept memberships into the Crypto Oasis ecosystem and I believe every association or ecosystem has its own target. I believe in cooperation and doing all we can to grow a small markets together into a very big market.” He hopes to expand their scope to include the entire UAE and MENA region.

So while the world grapples with the events of FTX exchange and its aftermath, the UAE continues to build its crypto blockchain economy and we might see more associations pop up in other parts of the UAE.

Binance sees close to 50 percent growth in MENA users on its platform

Binance sees close to 50 percent growth in MENA users on its platform

Binance crypto exchange saw a 49 percent growth in the number of users from MENA region in 2022. As per the news this reflects the growing appetite for virtual assets.

In addition Binance has grown its employee base in Dubai alone to over 400 employees.  This comes as Binance recently obtained its Minimal Viable Product (MVP) license from Dubai’s Virtual Asset Regulatory Authority (VARA) which allows the company to offer a range of approved virtual asset related services to suitably qualified retail and institutional investors in Dubai.

Richard Teng, Regional Head of MENA at Binance, comments, “It is extremely encouraging to see this level of growth in the MENA region, not just in terms of user adoption but also in terms of headcount and new employees in our own teams, particularly in the UAE. We are witnessing rapid adoption of blockchain technology in the region and we believe there is huge potential for the UAE to soon become a leading virtual asset hub.”

He adds, “We’ve got exciting plans for Binance in the MENA region and are putting together a highly skilled team to lead our expansion, setting a firm foundation for our future growth. Aligned with our growth objectives, we remain committed to working closely with local regulators to establish a safe and secure ecosystem, and we will continue our cooperation in Dubai and the wider UAE to develop a robust virtual asset infrastructure that protects the market and the investors.”

Abu Dhabi’s virtual assets regulator First MENA regulator to allow NFT trading

Abu Dhabi’s virtual assets regulator First MENA regulator to allow NFT trading

UAE virtual asset regulator in Abu Dhabi,  FSRA (Financial Services Regulatory Authority) of ADGM ( Abu Dhabi Global Market) has enhanced its capital markets framework, allowing for the trading of NFTs  (Non Fungible tokens) on virtual asset regulated platforms, This means that MTFs/Custodians (Multilateral trading Facilities) operating within ADGM are now able to seek approval from the FSRA to engage in Non-Fungible Token (NFT) activities.

As per the news, these are considered significant enhancements to its capital markets framework, across spot commodities, securities, derivatives, benchmarks, environmental instruments and virtual assets that will further improve on its innovative and progressive regime and leadership in financial markets.

Alongside its innovative approach to virtual assets, the ADGM has now implemented its regulatory framework for spot commodity and environmental instrument activities, making it the first international financial centre in the MENA region to do so

Ahmed Jasim Al Zaabi, Chairman of the ADGM, said, “The ADGM wishes to thank all those who responded to the consultation paper released earlier this year. The degree of interest shown in the consultation, as well as the keen interest by participants looking to undertake activities in these significant new areas, is hugely positive. Collectively, the ADGM and its market participants continue to provide regulatory and industry leadership, positioning the ADGM and Abu Dhabi as the jurisdiction of choice. These enhancements to our capital markets framework will unlock the next stage of investment and growth opportunities, across commodities, environmental instruments, virtual assets activities and wider financial markets.”

Prior to this announcement, ADGM’s FSRA had also announced that stablecoins could now be traded on virtual asset platforms. As they stated, ADGM will only permit those tokens where price stability is maintained by the issuer holding the same fiat currency it purports to be tokenizing on a fully backed 1:1 basis. This therefore currently prevents the use within ADGM of other types of stablecoins, such as algorithmic stablecoins.

While VARA (Virtual Assets Regulatory Authority) based out of Dubai continues to license virtual asset exchanges such as Binance with full licenses, it has yet to set its framework for the regulation of NFTs or stablecoins.

Despite this the UAE remains one of the most advanced virtual asset regulated hubs globally.

Select UAE Local bank customers can now trade with Binance in Dubai

Select UAE Local bank customers can now trade with Binance in Dubai

Binance, crypto exchange has received its Minimal Viable Product (MVP) license from Dubai’s Virtual Asset Regulatory Authority (VARA). Local bank clients approved by VARA will be able to utilize the Binance platform. Users will benefit from higher consumer protection levels because Binance is now a fully regulated platform in Dubai.

Binance is now able to open a client money account with a UAE local bank and provide services to qualified customers. Services include, virtual asset exchange services, conversion between virtual assets and fiat currencies, transfer of virtual assets, custody and management of virtual assets, virtual token offering and trading services and virtual assets payments and remittance services

His Excellency Helal Saeed Almarri, Chairman of VARA said, “We are pleased to have Binance licensed to operate within the VARA MVP Programme. The VARA regime aims to strike an effective balance between value creation and risk mitigation, enabling open market innovation while assuring protection for the economically vulnerable. The MVP Phase, is designed for select global players across the value chain, that are committed to responsible industry participation and VARA looks forward to Binance being an active contributor, reinforcing Dubai’s commitment towards creating a next-gen secure ecosystem for this future economy.”

Changpeng Zhao (CZ), founder and CEO of Binance, commented: “At Binance we welcome regulations that are globally consistent, enable responsible innovation, protect users, and give them choice. VARA’s unique operating model is setting a benchmark for the global industry, and this most recent registration is an acknowledgement of our compliance and safety processes in the new regulatory framework.  We strongly believe there is a significant opportunity to work with our industry peers to develop consistent implementation standards around the world as we have been doing in Dubai.”

Alexander Chehade, Binance Dubai General Manager, noted: “Our registration in Dubai is a reflection of the country’s progressive stance on blockchain technology and its willingness to embrace this sector through collaboration. We look forward to continued partnership as we build upon our team and operations in Dubai to roll out additional services including local banking capabilities and enhanced products.”

Abu Dhabi’s ADGM publishes virtual asset regulatory guidelines

Abu Dhabi’s ADGM publishes virtual asset regulatory guidelines

Abu Dhabi Global Market (ADGM), the International Financial Centre in Abu Dhabi, announced that its financial regulator, the Financial Services Regulatory Authority (FSRA), has published Guiding Principles on its approach to virtual asset regulation and supervision as a way to outline its expectations for the asset class and service providers in the sector.

The principles state the FSRA’s risk appetite and priorities for the sector, with each principle covering one of the key pillars of ADGM’s holistic approach, which includes a robust and transparent regulatory framework; high standards of authorization; preventing money laundering and other financial crimes; risk-sensitive supervision; enforcement powers for regulatory breaches; and its commitment to international cooperation. They will therefore be of particular relevance to potential applicants to ADGM and other regulators with an interest in this area.

As per the document, The FSRA’s risk appetite for VA activities is such that it will only admit operators to its jurisdiction who at the outset can unequivocally meet the transparent, high standards outlined in its framework. This will maintain the best-in-class reputation of the ADGM ecosystem and instil market confidence to promote growth and investment. 

In addition the document discusses stablecoins, ADGM will only permit those tokens where price stability is maintained by the issuer holding the same fiat currency it purports to be tokenising on a fully backed 1:1 basis. This therefore currently prevents the use within ADGM of other types of stablecoins, such as algorithmic stablecoins.

Emmanuel Givanakis, CEO of the FSRA, said, “These guiding principles will provide greater clarity to investors, other regulators, industry and the wider public of our approach to regulation in this area and key expectations we have set on current virtual asset service providers in ADGM and potential applicants. They also outline the tools we have at our disposal to mitigate the material risks that are born from these activities and the regulatory powers to identify and act upon any misconduct. Consistent with the FSRA’s broader strategy to align with international best practices, these principles make clear the high standards of our framework at a time of increased volatility and regulatory focus.”

UAE ADGM grants Klickl a digital asset dealer and custodian preliminary license

UAE ADGM grants Klickl a digital asset dealer and custodian preliminary license

UAE ADGM (Abu Dhabi Global Market) has granted Klickl, a virtual asset service provider with offices in Hong Kong and Abu Dhabi, an in principle Approval license to operate as a digital asset broker and custodian.

Michael Zhao, Co-Founder and CEO at Klickl said “The regulated route is the only route for any crypto company’s growth if it wants to be a serious player for the long run.  Long gone are the days where digital asset players enjoy early-mover advantage benefiting from fast growing bull market. Recent crypto market turbulence and big selloff caused by greed-led FOMO driven sentiment is just another example to show why the market needs proper risk control and compliance.”

Formerly known as IDCM, the digital asset exchange group recently rebranded to Klickl representing the sound coins make when clicking in harmony and prosperity.

Klickl aims to deliver that All-in One crypto super app which serves all crypto needs in the ever-evolving digital era.

ADGM has approved license for more than seven virtual asset exchanges to operate in the UAE. The names include Binance, Kraken, as international players, and BitOasis, Midchains, Matrix and others as local ones.

The UAE has become a blockchain and crypto hub and one of the leading regulated environments across the globe. This has attracted crypto entities that were previously headquartered in Hong Kong and Singapore among others.