Regulators in the United Arab Emirates have not commenced issuing Full Market Product Licenses (FMP). The regulators confirmed that the investors failed to fully comply with the main four requirements of the Virtual Assets Regulatory Authority (VARA).
Full Market Product License Requirement
A statement by the UAE Minister for Digital Assets, Omar Sultan Al Olama, at the World Economic Forum confirms that leading crypto exchanges such as Binance fail to meet VARA requirements.
The test to protect consumers and investors from bad players in the crypto market has influenced UAE regulators to be more strict with the crypto licensing process. The process has four main stages that traders are encouraged to comply with before engaging in any crypto-related activity in the UAE.
At the initial stage, the trader obtains a provisional permit that allows the firm to proceed with operations. Before issuing the provisional permit, the regulators exercise a background check to analyze the firm’s suitability in the service industry.
Consequently, the regulator will issue a Minimum Viable Product (MVP) preparatory license that enables investors to pursue viable crypto markets in the UAE. The regulators will soon launch an MVP-operating license that will enable the traders to engage in fully regulated crypto products and markets. The regulators have announced that the information needs to be corrected and more accurate for any trader purporting to own an MVP- operating permit.
Also read:The final process involves issuing the FMP license that awaits VARA to develop appropriate licensing conditions.
UAE Crypto Regulations
In 2022, VARA regulators issued the leading crypto exchange Binance with a license that enabled the firm to provide financial solutions to retail and institution crypto enthusiasts based in Dubai.
The licensing of Binance s encouraged other crypto firms in UAE to comply with the MVP licensing requirements. Compliance with the authority influenced crypto services providers to build customers’ trust and expand to new markets.
However, the VARA regulators restricted MVP-licensed firms from engaging with mass retail crypto consumers.
Olama has assured the crypto trading firms that once the FMP license is approved, the traders can pursue more opportunities in the crypto space. Olama pointed out that the regulators will be more strict on the FMP license to protect the crypto industry from external manipulation and improve conformity.
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