In a strategic move to bolster its global compliance efforts, Binance, the world’s leading cryptocurrency exchange, has finally obtained a coveted regulatory license in Dubai. This milestone achievement comes after rigorous negotiations and pivotal decisions, including the sacrifice of voting power by Binance co-founder Changpeng Zhao.
According to Binance CEO Richard Teng, the long-awaited Virtual Asset Service Provider (VASP) license was granted following Zhao’s relinquishment of his voting rights in Binance FZE, the exchange’s Dubai-based entity. This pivotal step, confirmed to Bloomberg on April 18, represents a crucial final requirement set forth by the Virtual Assets Regulatory Authority (VARA).
The granting of the full regulatory license not only underscores Binance’s commitment to compliance but also marks a significant victory for the exchange amidst ongoing regulatory challenges. The move follows heightened scrutiny in the aftermath of the FTX collapse, which triggered a series of regulatory investigations.
Binance’s proactive approach to regulatory compliance comes on the heels of a landmark settlement with United States authorities in November 2023. The exchange agreed to a substantial $4.3-billion settlement to resolve federal charges stemming from alleged lapses in Anti-Money Laundering (AML) protocols, which were found to be in violation of the Bank Secrecy Act.
As part of the settlement, Binance co-founder Changpeng Zhao pleaded guilty to one felony count related to the failure to maintain adequate AML protocols. Zhao’s resignation was also a condition of the plea deal, marking a significant leadership transition within the organization. With Zhao’s sentencing scheduled for April 30, the co-founder faces a potential prison term of up to 18 months, pending judicial proceedings.
Despite these challenges, Binance remains steadfast in its commitment to regulatory compliance and global expansion. The acquisition of the VASP license in Dubai represents a pivotal step forward in solidifying the exchange’s position as a trusted player in the cryptocurrency ecosystem, while navigating the evolving regulatory landscape with diligence and foresight.
