FTX Gets Dubai License Amidst Inflow of Russian Crypto into the UAE

Key Insights:

• FTX announces Dubai digital asset exchange license.
• The latest approval comes amidst an FTX expansion drive that includes the launch of FTX Europe.
• News of Russians transferring crypto assets to the UAE could cause friction with NATO nations.

Global crypto exchange FTX has had a busy start to the year. To date, the big headline of the year was Superbowl LVI, with FTX among several exchanges buying airtime to build brand awareness.

While crypto ads at Superbowl LVI got the NFL crowd abuzz, Spanish football distanced itself from the crypto world.

FTX, together with Binance and Polkadot, was in the running to become a Barcelona Football Club shirt sponsor. The Spanish giant rejected sponsorship deals citing a lack of confidence in the crypto sector and a lack of economic solidity as reasons for rejecting the crypto exchange bids.

Despite the setback, FTX is an expansion mode.

FTX Gets Virtual Asset License in Dubai

Last week, the Prime Minister of Dubai issued the Dubai Virtual Regulation Law that would fall under the purview of the Dubai Virtual Asset Regulatory Authority (VARA).

According to the new law, an enterprise must have a presence in Dubai to offer virtual asset-related services. An entity must also obtain a license from VARA.

Following last week’s news, FTX announced becoming the first to receive a digital exchange license from Dubai.

FTX CEO Sam Bankman-Fried announced the news on Twitter earlier today, saying,

“Really excited to receive the first (and so far only) digital asset exchange license in Dubai.”

Really excited to receive the first (and so far only) digial asset exchange license from Dubai!

Adding to the list: https://t.co/50ELyIX1cd https://t.co/1jEkTz52qS

— SBF (@SBF_FTX) March 15, 2022

As per Dubai’s Virtual Regulation Law, FTX will establish regional headquarters in Dubai and plan to offer crypto derivative products.

Last week, newly launched FTX Europe announced Cyprus Financial Market Regulator approval for operating in the country.

FTX has not been alone in its expansion plans. Binance has also targeted the Middle East.

FTX Follows Binance into the Dubai Crypto Space

Ahead of the FTX announcement, news hit the wires of Binance having discussions with Dubai World Trade Centre free zone for a virtual asset service provider license.

Last December, Binance signed an agreement with Dubai World Trade Centre Authority to establish an industry hub for virtual assets. Under the agreement, Binance will support Dubai’s ambition to drive economic prosperity through digital innovation.

In December, the Kingdom of Bahrain awarded Binance in-principal approval to be a crypto-asset provider.

Binance and FTX Target Dubai as Russian Crypto Floods in

Last weekend, crypto firms in the United Arab Emirates (UAE) reported major crypto sales orders. Russian clients are making crypto sales orders running into billions of dollars. One sale order alone was reportedly for 125,000 Bitcoin (BTC).

Russians are also reportedly snapping up UAE real estate with crypto. Since the Russian invasion of Ukraine, the UAE has taken a neutral position.

Any news of Russians circumventing sanctions by accessing Dubai could leave Binance and FTX in the cross-hairs of any response from NATO nations.