Dubai Regulator Scales Up Crypto Grip, Orders Binance To Submit Data On Ownership, Audit Procedure

Dubai, a city in the United Arab Emirates that has become one of the world's top cryptocurrency hubs over the past years, is deliberately scaling up its grip in the crypto space, particularly for businesses seeking licenses following the spectacular collapse of FTX.

The Virtual Assets Regulatory Authority (VARA), the regulator responsible for cryptocurrency activities in Dubai, asked Binance, the world's largest centralized crypto exchange platform by trading volume, and other digital assets to hand over more information about their operations as part of the regulator's requirements, Bloomberg said, citing "people familiar with the matter."

In recent weeks, VARA officials have asked Binance to provide more data concerning its governance, ownership structure and auditing procedures, people who wanted to remain anonymous disclosed, noting that it is not an isolated case since the regulator also sought similar information from other companies seeking permits in the country.

As UAE regulators continue to impose a tighter crypto licensing approach, Binance, particularly its CEO Changpeng Zhao (CZ), who lives in Dubai, could face another potential headache at a time when the crypto company is grappling with mounting pressure from financial regulators in the U.S.

Last month, the Commodity Futures Trading Commission (CFTC) in U.S. slapped Binance and CZ with a lawsuit, alleging that the crypto platform is engaged in improper trading and compliance procedures.

Following CFTC's lawsuit, CZ shared a blog, saying, "Today, the CFTC filed an unexpected and disappointing civil complaint, despite our working cooperatively with the CFTC for over two years."

"Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint," he added in the blog.

He also affirmed that a CEX (Centralized Crypto Exchange) "does not trade for profit or 'manipulate' the market under any circumstances," calling the lawsuit "unexpected and disappointing."

Multiple law firms have filed a lawsuit to the tune of $1 billion against Binance, CZ, Jimmy Butler and other crypto influencers, which hinges on the allegation that the exchange was trading unregistered securities.

Moskowitz Law Firm and Boies Schiller Flexner, the same law firms that previously teamed up to bring a class action against the now-bankrupt crypto broker Voyager, filed the lawsuit on March 31 in the Southern District of Florida.

The law firms represent two plaintiffs from Florida and a person from California – all of them lost money trading coins that Binance and other crypto influencers promoted.

"This is a classic example of a centralized exchange, which is promoting the sale of an unregistered security," the complaint alleged.