Ignorance of the law is not an excuse, as the old saying “Ignorantia juris non excusat” states. Nevertheless, keeping up with the ever-changing sands of legislation can be challenging in the fast-paced and ever-evolving field of blockchain technology and services for virtual assets. This article takes a look at a recent event that highlights how important it is to maintain compliance with applicable regulations in the world of virtual assets.

An important announcement was made by Binance, one of the most prominent cryptocurrency exchanges in the world, on August 1, 2023. Binance was the first firm to obtain an Operational Minimum Viable Product (MVP) license from Dubai’s Virtual Asset Regulatory Authority (VARA). This milestone was accomplished through Binance FZE, the exchange’s wholly owned subsidiary in Dubai.

Binance’s accomplishment was the culmination of a rigorous voyage that began in March 2022 with the acquisition of a provisional MVP license, followed by a preparatory license in September of the same year. The FATF-compliant Operational MVP license, a significant upgrade from the Provisional Licence, ushers in a new era of virtual asset services in Dubai.

This license’s issuance has significant implications for the world of virtual assets. It allows institutional and qualified retail investors access to exchange and broker-dealer services regulated by VARA. In turn, this promotes the expansion of Dubai’s flourishing market for virtual assets, while also prioritizing investor protection and market assurance standards. According to the ancient legal maxim “Ubi jus ibi remedium” (where there is a right, there is a remedy), VARA’s stringent regulations effectively safeguard investors’ rights.

Yet, what does this mean for other virtual asset service providers (VASPs) eyeing Dubai’s booming market? Richard Teng, Head of Regional Markets at Binance, encapsulates it as the culmination of “over a year of due diligence, collaboration, and consistent demonstration of responsible intent”. Other VASPs must emulate this diligent approach to regulatory compliance, if they wish to secure their own Operational MVP license.

When considering the future, virtual asset service providers (VASPs) should place their primary emphasis on developing comprehensive Know-Your-Customer (KYC) and Customer-Due-Diligence (CDD) protocols. These are essential components of the regulatory obligations imposed by VARA. By putting these protections into place, you can ensure that the relocation of customers will be both secure and seamless.

Moreover, collaboration with VARA and other regulatory bodies is essential. According to the legal maxim “Vigilantibus et non dormientibus jura subveniunt,” the law benefits those who are vigilant but not those who are asleep. VASPs can demonstrate their commitment to operating within a regulated ecosystem by proactively engaging with VARA.

In conclusion, Binance’s achievement of the Operational MVP License marks the beginning of a new era in Dubai’s virtual asset landscape. It demonstrates Binance’s commitment to regulatory compliance and paves the way for future collaborations in this rapidly evolving industry. The path may be difficult for other VASPs seeking a foothold in Dubai’s market, but the potential rewards are substantial. The dream of operating within a fully regulated, FATF-compliant ecosystem can become a reality with vigilance, collaboration, and rigorous adherence to VARA’s regulations.
CRYPTOVERE Legal Consultancy is dedicated to assisting Virtual Asset Service Providers (VASPs) in the application of a VARA license. Our team of devoted legal experts has extensive knowledge in the complex field of virtual asset regulation in the UAE and is prepared to guide you through each stage of the licensing procedure. We believe in the transformative power of blockchain technology and are eager to assist VASPs in navigating the regulatory environment of this dynamic industry. We encourage you to visit our website at www.cryptoverselawyers.io to learn more about our services and how we can assist your company. Let us work together to define the future of virtual assets in the UAE and around the world.

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