The Dubai Virtual Assets Regulatory Authority (VARA) has recently granted a Virtual Asset Service Provider (VASP) license to the cryptocurrency wallet company known as Backpack.
This development marks the inception of Backpack Exchange, a platform exclusively designed for crypto exchange services within the Dubai market.
Notably, the VARA license confines Backpack to offering only crypto exchange services and doesn’t encompass their other virtual asset-related products and services.
The newly launched Backpack Exchange boasts cutting-edge features, including zero-knowledge (ZK) proof-of-reserves, multi-party computation (MPC) for secure custody, and low-latency order execution.
In a significant revelation, it was disclosed that Backpack Exchange had successfully acquired operational licenses in multiple jurisdictions worldwide over the preceding five months.
While the flagship Backpack Wallet remains an unregulated product, it is strategically engineered to facilitate users’ transition from fiat to on-chain applications in the future.
Armani Ferrante, the CEO and co-founder of Backpack, emphasized his commitment to bringing greater transparency to crypto exchanges and eliminating opacity.
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He outlined the company’s vision, stating, “Using cryptographic techniques like zk-proofs, MPC, and state machine replication, Backpack Exchange hopes to raise the bar for transparency and compliance to demonstrate the best this technology has to offer. Don’t trust, verify.”
Existing users of Backpack and Mad Lads will have exclusive access to Backpack Exchange starting from November 2023, with plans to make it accessible to the general public in Q1 2024.
During this period, Backpack intends to introduce various trading functionalities, including derivatives, margin trading, and cross-collateralization, to enhance its service offerings.
As of now, Backpack has not responded to requests for comments from Cointelegraph.
Dubai’s VARA regulator has been actively granting operational licenses to numerous crypto exchanges over the past year, solidifying its reputation as a crypto-friendly jurisdiction.
In February 2023, the regulator introduced new guidelines for VASPs operating in the emirate, mandating adherence to marketing, advertising, and promotion regulations.
Violators will face fines ranging from 20,000 UAE dirhams ($5,500) to 200,000 dirhams ($55,000), with repeat offenders potentially subject to fines as high as 500,000 dirhams ($135,000).
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