Dubai permits full operation to FTX subsidiary FZE via first MVP licence
Officials from Dubai claim that the subsidiary's operations will act as a regulatory test for upcoming commercial services employing virtual assets
By Shashank Bhardwaj
Dubai granted the first Minimal Viable Product (MVP) licence to FZE, a division of the crypto exchange FTX, on Friday, enabling full operation of the exchange in the area.
The operating licence was granted to FZE by Dubai's Virtual Asset Regulatory Authority (VARA) under the MVP programme, which is, according to Helal Saeed Almarri, director general of the Dubai WTC Authority, "intended for secure and sustainable growth in Dubai." The FTX FZE exchange is currently in the test phase of operations, emphasising various crypto services.
Sam Bankman-Fried, chief executive officer of FTX, said that the recently approved exchange would run on a model that includes regulatory monitoring and Financial Action Task Force (FATF) compliance procedures tailored to Tier 1 international financial markets. It was further disclosed that future commercial services utilising virtual assets would leverage the exchange's activities as a regulatory experiment.
Almarri emphasised the region's readiness for widespread crypto adoption when he said, "The MVP Phase, exclusive to chosen, responsible international players like FTX, will allow VARA to wisely create guidelines and risk mitigation levers for secure commercial operations."
With the licence, FTX FZE is authorised to offer qualified institutional investors regulated crypto derivatives products and trading services. The exchange can also serve as a clearing house, run a nonfungible token (NFT) market, and offer custodial services in the area.
This year, the use of crypto assets has advanced quickly in Dubai and the rest of the UAE. The emirates took their innovation wager a step further with the introduction of the Dubai Metaverse Strategy.
The curiosity of financial regulators about crypto assets and the endorsement of significant exchanges are influencing regulators worldwide. While some nations are concentrating on tightening regulations, Dubai's experimental approach and the European Union Markets in Crypto Assets proposal may serve as a model for other nations.
Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash