FZE, a subsidiary of crypto exchange FTX, has been awarded Dubai’s first Minimal Viable Product (MVP) license, allowing full operation of the exchange in the region.
Dubai’s Virtual Asset Regulatory Authority (VARA) issued the operating license to FZE under the MVP program, which according to Helal Saeed Almarri, the director general of Dubai WTC Authority, is designed for secure and sustainable growth in Dubai. For now, the FTX FZE exchange’s operations are in the test phase and will be focused on providing various crypto services.
According to FTX CEO Sam Bankman-Fried, the newly licensed exchange will operate under a model incorporating regulatory oversight and Financial Action Task Force (FATF) compliance controls catering to Tier 1 international financial markets. In addition, Almarri revealed that the exchange’s operations will be used as a regulatory trial for future commercial services using virtual assets.
“The MVP Phase, exclusive to select, responsible international players like FTX, will allow VARA to prudently structure guidelines and risk mitigation levers for secure commercial operations,” said Almarri.
With the license, FTX FZE has been approved to deploy regulated crypto derivatives products and trading services to qualified institutional investors. In addition, the exchange can also act as a clearing house, operate a nonfungible token (NFT) marketplace, and provide custodial services across the region.
Back in March 2022, FTX was the first to receive Dubai’s virtual asset exchange (VAX) license soon after the regulators signed off the virtual assets law and established the Dubai VARA. Crypto exchange OKX also received a provisional license from Dubai’s regulatory authorities to provide additional services to local investors and financial services providers.
Dubai, and the rest of the UAE, have been taking steps towards cryptocurrency adoption at a fast pace this year. The emirates went a step further on its bet for innovation earlier this year with the launch of Dubai Metaverse Strategy.
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US crypto exchange FTX is continuing to acquire and expand in the crypto space, with reports emerging that the exchange is in talks to acquire Bithumb. The exchange has also backed a slew of crypto firms, including the likes of Voyager Digital and BlockFi.
Rumoured Bithumb Acquisition
According to several reports, FTX is in talks to acquire South Korea’s second-largest exchange, Bithumb. The companies have reportedly been in talks for the past few months, sources close to the matter revealed. The source declined to come on record due to the confidential nature of the dealings. While FTX has not commented on the matter so far, A spokesperson from Bithumb stated that they could not comment on anything at this stage.
While there is no official confirmation, if the deal is successful, the Sam Bankman-Fried-led exchange could gain a strong foothold in one of the most important markets in the crypto ecosystem.
Acquisition Spree Despite Crypto Downturn
Sam Bankman-Fried, in an earlier interview, had stated that he plans to spend billions on the acquisition of other firms in the crypto space. The crypto exchange is reportedly looking to raise further funds after spending significantly during the bear market. The company had carried out significant acquisitions and bailouts, which were a result of the bear market spawned by the collapse of the UST.
Both FTX and FTX.US are looking to raise funds at the same $32 billion valuation that was made in January 2022 for the primary platform and $8 billion for its American subsidy. Both arms of the exchange have already raised $400 million each.
Sam Bankman-Fried also revealed that FTX had set aside a few billion dollars to continue supporting crypto projects if their collapse could have a significant impact and destabilize the crypto industry. However, he stated that he believed the worst of the liquidity crunch and bear market was over and that things could get better from here on.
He also stated that he believed the current crypto downturn is good for the industry in the long term since it has eliminated the majority of leverage in the industry.
“I think what we’ve seen so far might be healthy. You know to the extent that what it is doing is flushing out some of the leverage that had to get flushed out. Flushing out some of the players that just were not capitalized well enough, you know. I think that could ultimately end up being moderately healthy for markets.”
Bithumb’s Market Share In South Korea
Upbit dominates the crypto market in South Korea. However, Bithumb is in a relatively strong position, holding the second largest market share among crypto exchanges in the country at 13%. The exchange was founded in 2014, has a daily trading volume of $569 million, and supports over 188 coins and 290 trading pairs.
However, Bithumb’s executives are also facing criminal charges for fraud to the tune of 100 billion won. The lawsuit resulted in the indictment of several company executives, including the exchange owner.
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