Another crypto company eyes expansion to innovation-friendly UAE

A crypto staking specialist is looking to expand to the United Arab Emirates, marking the latest segment player looking to set up shop there.

Northstake has gained initial approval from Dubai’s Virtual Asset Regulatory Authority (VARA) — a first step toward getting a Virtual Asset Service Provider (VASP) license, the company told Blockworks.

Such a license will allow the Denmark-based company to offer crypto custody services, like custodial staking, to institutional investors in the emirates. It ultimately seeks to use the UAE as “a strategic base” to survey expansion options.

Northstake CEO Jesper Johansen said the UAE is “becoming a global frontrunner in virtual assets.” Interest in Dubai among crypto firms picked up after the emirate established VARA in March 2022 — a regime industry executives have said fosters innovation in the segment.

“Our ambition is to contribute to the growth of the crypto ecosystem in the UAE, leveraging our expertise and innovative solutions in digital asset investments to support the region’s financial institutions and our local partners on innovative digital asset products,” Johansen told Blockworks.

Institutional investments — ones that exceed $1 million in value — made up about two-thirds of crypto transactions in the UAE between July 2022 and June 2023, according to a September Chainalysis report.

“This market confidence is validation of the efforts being made by the country’s leadership to offer commendable regulatory clarity and establish the nation as a global crypto hub,” Chainalysis’ research director Kim Grauer said in a statement at the time.

Northstake is just the latest crypto company moving into the region.

Crypto custodian Komainu was among the first to receive a full VASP license in August — though many have sought to offer services there.

Laser Digital, the crypto unit of Japanese bank Nomura, garnered a full crypto license from Dubai’s VARA that same month. M2 Exchange also gained the ability to offer custody and multilateral trading services for UAE residents around that time.

The move comes nearly a year after Northstake raised about $3 million to bolster its staking products for institutions. The company, with its multi-chain platform comprising yield-generating products, partnered with Coinify in August to serve the firm’s institutional and high net worth clients.

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