Dubai allows full operation to FTX subsidiary FZE through first MVP license

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On Friday, FZE, a subsidiary of crypto exchange FTX, received Dubai’s first Minimal Viable Product (MVP) license, allowing the exchange to fully function in the region.

The Virtual Asset Regulatory Authority (VARA) of Dubai has granted the operating license to FZE under the MVP program, which according to Helal Saeed Almarri, the Director General of the Dubai WTC Authority, is designed for safe and sustainable growth in Dubai . For now, the activities of the FTX FZE exchange are in the testing phase and will focus on offering various crypto services.

According to FTX CEO Sam Bankman-Fried, the newly licensed exchange will operate under a model that includes Financial Action Task Force (FATF) regulatory oversight and compliance audits for Tier 1 international financial markets. the exchange will be used as a regulatory trial for future commercial services using virtual assets.

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“The MVP phase, exclusive to select, responsible international players such as FTX, will enable VARA to carefully structure guidelines and risk mitigation levers for secure commercial operations,” said Almarri, pointing to the region’s readiness for expanded crypto adoption. .

With the license, FTX FZE is approved to deploy regulated crypto derivative products and trading services for qualified institutional investors. In addition, the exchange can also act as a clearinghouse, operate a non-fungible token (NFT) marketplace and provide custodial services across the region.

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In March 2022, FTX was the first to receive Dubai’s VAX (Virtual Asset Exchange) license shortly after regulators signed the Virtual Assets Act and established the Dubai VARA. Crypto exchange OKX also received a preliminary license from Dubai’s regulatory authorities to provide additional services to local investors and financial service providers.

Dubai and the rest of the UAE have been making rapid strides towards cryptocurrency adoption this year. The emirates took their commitment to innovation a step further earlier this year with the launch of Dubai Metaverse Strategy.

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Related: Dubai to ramp up metaverse efforts with 40,000 new jobs

The interest of financial authorities in cryptocurrencies and the approval of major exchanges is setting the tone for regulators around the world. While certain countries are focused on tightening controls, Dubai’s experimental approach and the recently given green light to the European Union Markets proposal in the Crypto Assets proposal could serve as a reference for other regions.