FTX Subsidiary, FZE, Is the First Recipient of Dubai’s Minimal Viable Product License
- The license enables FZE to start running its exchange operations fully in the region.
Dubai’s Minimum Viable Product (MVP) program has officially issued its first license to FZE, a subsidiary of the popular crypto exchange, FTX. Notably, the MVP program is under the supervision of Dubai’s Virtual Asset Regulatory Authority (VARA).
FZE Expands Towards Global Reach
The director-general of Dubai’s WTC authority, Helal Saeed Almarri, said the MVP program is designed to enhance sustainable growth and security in Dubai. Currently, FZE’s operations are still in the trial phase and will focus on offering multiple crypto-related services. Almarri added that FZE’s operations would guide future regulatory policies regarding commercial crypto service offerings.
He further said VARA only opened the MVP phase to specific and responsible multinational crypto players such as FTX. Thus, it would enable the regulator to have guidelines for mitigating risks for safe commercial crypto operations. The director-general said this approval also proves Dubai’s willingness to promote broader crypto adoption.
In his response to the license, FTX founder, Sam Bankman-Fried said FZE’s operating model would incorporate regulatory oversight. Also, it will comply with the Financial Action Task Force (FATF)’s policies regarding tier 1 financial markets worldwide. Head of FTX Europe, Patrick Gruhn, commented that the approval results from several months of discussions with Dubai’s VARA to issue the first crypto-MVP license.
Under this license, FZE can offer its regulated crypto derivatives products and services to investors that meet the appropriate standards. The license also permits the exchange to provide custodial services, act as a clearing house and run a non-fungible token (NFT) marketplace across the Dubai region. FTX was among the first recipients of the Dubai virtual asset exchange (VAX) license in march 2022.
That was when Dubai regulators approved the virtual assets bill and created Dubai’s VARA. After receiving its license, FTX announced plans to establish a headquarter in Dubai from where it would offer its crypto services to the UAE region.
An operating license for an FTX subsidiary (even though it is under a different program) will further strengthen FTX’s hold in the UAE region. OKX was also among the recipients of a provisional license from Dubai’s regulators. The exchange can also offer crypto-related services to individual and institutional investors in Dubai.
Dubai’s Crypto Adoption Strategy
Since the beginning of this year, the UAE (including Dubai) has been taking proactive steps in facilitating crypto adoption in that region. Earlier this year, the UAE launched the Dubai metaverse strategy to show its support for crypto-related innovations further.
Global regulators are becoming more interested in developing crypto policies due to the rising popularity of cryptos worldwide.
Some have supported the nascent crypto space by granting operating licenses to crypto exchanges. However, many of these regulators are still skeptical about the crypto industry and its potential.
Nevertheless, the recent approval of the markets in crypto assets proposal by the European Union and Dubai’s experimental approach towards crypto adoption may provide the basis for skeptical regulators to have a change of heart.
Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”
