The recent withdrawal of Binance’s application for certain operations in Abu Dhabi has raised eyebrows in the cryptocurrency community. This move, as mentioned in a recently updated filing, came as a surprise to many as Binance seemed to be focused on establishing a strong presence in the Middle East and North Africa (MENA) region. In this article, we will delve into the details of this withdrawal and explore its implications for Binance and the wider cryptocurrency industry.
The Abu Dhabi Global Market (ADGM) is the regulatory body responsible for the request that prompted Binance to withdraw its application. The withdrawal took effect on November 7, 2023, and the application itself was submitted on November 15, 2022. Binance’s original intention was to manage a collective investment fund, but ADGM’s stringent conditions, including the prohibition to hold or control client assets and work with retail clients, posed challenges for the exchange.
Binance’s decision to withdraw its application for operations in Abu Dhabi marks a notable shift in its strategy. Previously, the company had obtained preliminary approval to operate as a full broker-dealer in Abu Dhabi, indicating its strong interest in the region. In fact, Binance had been actively hiring over 100 positions in the area, signaling its commitment to expanding its foothold in the Middle East.
A Binance spokesperson provided a statement to CryptoSlate regarding the withdrawal, emphasising that the decision was made after an assessment of their global licensing needs. The spokesperson praised Abu Dhabi as a leader in the virtual and digital assets ecosystem, highlighting the city’s support for innovation and responsible growth. While the spokesperson did not explicitly mention whether retail services are currently or will be available in Abu Dhabi, they assured that Binance remains committed to collaborating with regulators in the Middle East and beyond.
Contrary to speculation, Binance’s withdrawal of its application in Abu Dhabi is unrelated to its recent settlement with various U.S. agencies following an investigation. This settlement coincided with the resignation of the company’s former CEO, Changpeng Zhao. According to a Reuters contact, the withdrawal was carried out by BV Investment Management, a unit within Binance, as confirmed by the company’s website.
The withdrawal of Binance’s application for operations in Abu Dhabi has raised questions about the exchange’s future plans and its commitment to expanding into the MENA region. While the exchange has expressed its dedication to collaborating with regulators, the withdrawal suggests that Binance may be reevaluating its priorities. As the cryptocurrency industry continues to evolve, it remains to be seen how Binance’s decision will shape its trajectory and influence the regulatory landscape in Abu Dhabi and beyond.
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