OKX, one of the world’s largest cryptocurrency exchanges, is seeking regulatory approval to operate in Dubai as it plans to expand the company’s Middle East operations, an executive told Reuters on Thursday.
Regulation is an industry trend, OKX Global Head of Government Relations Tim Byun said.
“We would like to get ahead of that curve and be regulated in a sound manner,” he said.
Earlier this month, the US Securities and Exchange Commission (SEC) sued Binance and Coinbase, another two of the largest crypto exchanges, for allegedly breaching its rules.
Byun said he believed the SEC’s move would push more applicants towards innovative regulators like Dubai’s Virtual Asset Regulatory Authority (VARA).
OKX plans to hire 30 staff, Byun said, after opening an office last month in the Dubai World Trade Center in the business and financial hub of the United Arab Emirates.
OKX Middle East said on Thursday it had received a preparatory licence from Dubai’s regulator, a first step towards securing an operating licence that would allow it to serve institutional clients and investors.
“If we expand Dubai to offer services in Saudi Arabia or Bahrain, to jurisdictions where there is no domestic framework required, then those domestic populations are actually getting a windfall benefit because we are regulated by an international regulator,” Byun said.
OKX is regulated in the Bahamas and currently does not allow customers from the United States to use its platform due to regulatory issues.
VARA was formed in March 2022 to regulate the emerging virtual asset sector in the emirate – excluding the Dubai International Financial Centre financial free zone — as the UAE pushes to become a global hub for the industry.
No firm has yet been licensed under VARA’s full market product (FMP) stage — which would permit the serving of retail clients, regulator information shows. OKX plans to apply for such a licence, Byun said.
“If territories are willing to come up with a balanced clear transparent approach, OKX would like to be regulated and licensed and operate in that jurisdiction,” Byun said.
© Thomson Reuters 2023