Binance Holdings Ltd.’s quest for a full crypto license in Dubai has finally come to fruition, but not without a significant concession. According to sources familiar with the matter, co-founder Changpeng Zhao (CZ) had to relinquish voting control of the local entity, Binance FZE, to secure regulatory approval.
This news comes after CEO Richard Teng confirmed the license acquisition in a Bloomberg Television interview. The Virtual Asset Service Provider (VASP) license represents a major victory for Binance, which has faced a barrage of regulatory scrutiny in recent years.
From Regulatory Scrutiny to Dubai Approval
The past two years have been challenging for Binance. A string of regulatory actions culminated in a hefty $4.3 billion penalty agreement with US authorities in November 2023. As part of the deal, CZ was forced to step down as CEO and is reportedly awaiting sentencing on anti-money laundering and sanctions charges.
While Binance FZE held provisional Operational MVP licenses since mid-2023, a full VASP license remained elusive. Reportedly, one of the final hurdles was CZ’s voting control within the Dubai entity. Dubai’s regulators, the Virtual Assets Regulatory Authority (VARA), reportedly sought assurances that Binance FZE would not deviate from the agreement with US authorities.
Following negotiations regarding CZ’s control, Binance and VARA embarked on a comprehensive review of the exchange’s product offerings in Dubai. While neither Binance nor CZ’s representatives commented on the specifics, VARA also declined to comment.
CZ Retains Ownership, Dubai Gains Licensed Exchange
Despite relinquishing voting control, CZ reportedly remains the ultimate beneficial owner of Binance FZE’s Abu Dhabi-based parent company. This move addresses regulatory concerns while allowing CZ to maintain some level of ownership.
The VASP license is a significant win for Binance, granting them the ability to serve retail customers in Dubai. Previously, their Operational MVP license only allowed them to cater to institutional and qualified investors. This puts them on more equal footing with competitors like OKX and Crypto.com, who secured VASP licenses earlier.
Teng’s Focus: Compliance and Global Expansion
Since taking the helm, CEO Richard Teng has prioritized improving Binance’s compliance posture and forging stronger relationships with regulators worldwide. This focus comes after numerous countries, including India and Belgium, took action against Binance for operating without proper licensing.
While Binance doesn’t have a formal headquarters, Teng has hinted at discussions with several jurisdictions that could potentially serve as a global base.
The Dubai license acquisition marks a turning point for Binance, demonstrating their commitment to regulatory compliance while expanding their global reach. With Teng leading the charge, Binance aims to become a leader in regulated cryptocurrency trading, even as CZ navigates legal challenges in the US.
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