The Middle Eastern arm of OKX, the second-largest cryptocurrency exchange by trading volume, has received an MVP Preparatory license from the Dubai Virtual Assets Regulatory Authority (VARA), allowing it to get ready for when the license becomes operational.
OKX Middle East has already taken up residence in a new office in Dubai World Trade Center, and says it plans to expand the number of staff to 30, with a focus on local hires and senior management.
Once the Minimal Viable Product (MVP) license becomes fully operational, OKX Middle East will provide spot, derivatives and fiat services, including U.S. dollar and United Arab Emirates dirham (AED) deposits, withdrawals and spot-pairs, the company said in a press release.
“We think Dubai is very important and serves as our regional hub for UAE and MENA (Middle East and North Africa),” Tim Byun, OKX global head of government relations, said in an interview. “[Dubai] has probably the most comprehensive and timely regulation to date. It has one responsible, dedicated regulator in VARA, and we think that clarity and finality of who to go to when it comes to regulations is a huge plus.”
Crypto exchanges are exploring their options around the globe, particularly following recent lawsuits in the U.S. by the Securities and Exchange Commission (SEC). Coinbase, for example, is looking to Bermuda to set up an offshore hub, while Binance praised Dubai as a base in a recent interview with CoinDesk. Singapore-based crypto platform Crypto.com received an MVP Preparatory license from Vara in March.
As well as siding with Dubai, both OKX and Binance have followed a similar path of shuttering operations in Canada for the time being. Byun pointed out OKX remains strongly committed to Canada and the Ontario Securities Commission (OSC).
“We are not dropping out of Canada,” he said. “We are progressing with our license as a broker dealer with the OSC.” While it may be “a long road,” the exchange will get back to Canada as soon as possible, he said.
In terms of how OKX, currently based in the Seychelles, is reacting to the recent SEC enforcement actions against exchanges, Byun said his company expanded very early into the U.S. with a separate brand in the form of OKCoin.
“For OKX, we have always blocked U.S. customers and so we are not active in the U.S.,” Byun said. “We will make a decision about the U.S., when and if to enter that market, in an appropriate and compliant manner. But we think that outside of the U.S. there are huge opportunities. That’s what we love about Dubai, as well as the Bahamas and other territories such as Gibraltar, France, and the entire EU, as they come out with MiCA in 2024.” MiCA is the European Union's Markets in Crypto Assets legislation.
Asked if OKX expects similar treatment from SEC to that received by Coinbase and Binance, Byun said: “I can’t speak to any specific or plausible or future actions.”
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