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The world’s largest cryptocurrency exchange Binance announced that it has received the long-awaited regulatory license in Dubai. Binance CEO Richard Teng revealed on April 18 to Bloomberg that Binance obtained the Crypto Asset Service Provider (VASP) license following the resignation of co-founder Changpeng Zhao from his voting rights in the exchange’s local entity.
A Significant Step for Binance
According to sources familiar with the matter who wished to remain anonymous, the final condition for the Crypto Assets Regulatory Authority (VARA) to issue the VASP license was Zhao’s resignation from his voting rights at Binance FZE, the Dubai-based unit of the exchange.
The full regulatory license represents a significant achievement for Binance, which has been under regulatory scrutiny since the bankruptcy of FTX. In November 2023, Binance agreed to pay $4.3 billion to U.S. authorities to settle federal charges related to deficiencies in its anti-money laundering (AML) protocols that violated the Bank Secrecy Act.
Binance co-founder Zhao admitted his guilt for failing to maintain adequate AML protocols and resigned as part of a plea deal. The final decision for Zhao will be made on April 30, with Zhao facing up to 18 months in prison.
Crypto Exchanges and Legal Processes
Following the bankruptcy of FTX, many governments began taking significant steps towards regulating cryptocurrency exchanges. Particularly, actions led by the United States and the United Kingdom served as examples for many other governments.
Regulations requiring crypto exchanges to hold a designated fund as insurance, obtain licenses from competent authorities, and comply with taxation processes on crypto transactions have brought the operations of many exchanges, including Binance, to a halt.
During this period, the U.S.-based Coinbase took notable steps in response to the situation, and developments sparked rumors that the crypto exchange might move its headquarters to Canada. The exchange that managed to obtain a license from the United Kingdom set an important precedent in crisis management for crypto exchanges.
