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Amidst the growing regulatory pressure, leading cryptocurrency exchange by trading volume Binance has moved to withdraw its application for an investment fund license from Abu Dhabi authorities.
Binance Rethinks 1-Year Abu Dhabi License
BV Investment Management, Binance’s subsidiary in the United Arab Emirates (UAE) decided against pursuing the license to run the Abu Dhabi collective investment fund and therefore, withdrew its filing. Notably, the registration has been made with Abu Dhabi’s Financial Services Regulatory Authority (FSRA) since November last year.
It started in 2022 with the digital asset service provider securing the Financial Services Permission (FSP) to start its crypto custody services in the Abu Dhabi Global Market (ADGM). The FSP license gave Binance access to provide custody services to professional clients in the region if they meet the FSP’s standards as defined by the FSRA.
It is worth noting that the FSP license followed an initial In-Principle Approval (IPA) from the ADGM authority to operate as a broker-dealer in virtual assets. Binance also holds the Operational Minimum Viable Product license in Dubai, the UAE, making it the first crypto exchange to wield such authorization.
It provides users with access to regulated virtual asset services on the exchange, such as fiat on-ramp and off-ramp services under Dubai’s Virtual Assets Regulatory Authority (VARA) investor protection and market assurance standards. The exchange has a full license from El Salvador, underscoring how it is not entirely weighed down by regulations.
Regulatory Scrutiny Weighs Down Binance
A Binance representative explained that the decision to withdraw the application for the Abu Dhabi license was made after the company assessed its global licensing need and came to the conclusion that the application was not necessary.
Even though this spokesperson claimed that the withdrawal had nothing to do with the recent enforcement action on the exchange and its executives, it is obvious that Binance is going through a turbulent time.
A few weeks ago, the U.S. Department of Justice (DOJ) proposed a settlement term of more than $4.3 billion with Binance. This was to resolve the investigation that had been ongoing for many years. Binance founder Changpeng ‘CZ’ Zhao got entangled in the mix which eventually led to him pleading guilty to an anti-money laundering violation charge and vacating his position as the CEO of the exchange.
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