Shalini Nagarajan

Dubai says it has now attracted more than 500 crypto companies to the wealthy Middle Eastern city’s budding digital asset ecosystem.



The Dubai Multi Commodities Centre (DMCC) <a href="https://cms.dmcc.ae/news/dmcc-attracts-3049-businesses-dubai-2022-reaching-22000-member-companies-through-another-record-year" target="_blank" rel="noreferrer noopener">said</a> Monday it registered around 3,000 new businesses last year, representing a 23% jump from 2021.



Of those, 343 were digital asset startups joining DMCC&#8217;s “Crypto Center,&#8221; the group told Blockworks, which would mean around 150 crypto-related startups were added in 2021.



The DMCC is the city’s flagship free zone which gives tax breaks and other benefits to startups. It launched a crypto hub in 2021, located in a 68-storey skyscraper in the Jumeirah Lake Towers area of Dubai. 



The center is meant to serve as a coworking and networking space for entrepreneurs in the crypto and blockchain sectors.



While crypto technically falls under the Virtual Assets Regulatory Authority (VARA) purview, the Securities and Commodities Authority (SCA) — a UAE federal agency — is also responsible for some oversight of the digital asset industry.



“Backed by a strong regional macroeconomic landscape, DMCC has been efficiently accelerating its growth strategy throughout 2022, focusing on supporting its member companies in high-impact sectors such as Web3 and blockchain technologies, commodities and global trade,” said DMCC CEO Ahmed Bin Sulayem.



A number of crypto firms <a href="https://blockworks.co/news/crypto-seeks-freedom-in-the-uae-is-it-a-regulatory-rug-pull" target="_blank" rel="noreferrer noopener">began setting up in the UAE last year</a> to take advantage of the region’s ambitions to thrive as a crypto hub. 



Major crypto companies with provisional licenses, such as <a href="https://blockworks.co/news/binance-granted-license-to-operate-in-dubai" target="_blank" rel="noreferrer noopener">Binance</a> and <a href="https://blockworks.co/news/crypto-com-secures-provisional-approval-to-open-crypto-exchange-in-dubai" target="_blank" rel="noreferrer noopener">Crypto.com</a>, haven’t opted to join the DMCC per its member <a href="https://www.dmcc.ae/business-search?directory=1&amp;submissionGuid=0b2cf711-289f-4492-8e87-fbbc3a5a2e04">directory</a>. But the DMCC highlighted a number of metaverse-centric startups on its member list.



Despite the promotion and supposed ease of setting up there, some have found their entrepreneurial journeys complicated as the due diligence process can be taxing.



The center <a href="https://gulfbusiness.com/dmcc-crypto-centre-vc-firm-brinc-to-provide-members-access-to-150m-accelerator-fund/" target="_blank" rel="noreferrer noopener">reportedly</a> partnered with Hong Kong-headquarterd venture capital firm Brinc last October. Brinc said it would offer potential funding opportunities to DMCC crypto startups through its $150 million accelerator vehicle.



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Dubai Free Zone Now Home to More Than 500 Crypto Startups

Sebastian Sinclair

<div id="highlights-block_62b124acabb52" class="highlights">
 <ul>
 <li>Dubai&#8217;s government is hoping to attract foreign investment following the passage of its Virtual Asset Law in February</li>
 <li>Hex Trust is the latest crypto firm to be approved, in part, for licensure within the emirate</li>
 </ul>
 
</div>



Hong Kong-based crypto custodian Hex Trust has become the latest crypto firm to receive provisional approval from the Government of Dubai to conduct business in the region.



Hex Trust said it is in the process of obtaining a Virtual Asset MVP License via the emirate&#8217;s Virtual Assets Regulatory Authority (VARA) to provide a range of services to institutional clients and investors, according to a statement Monday.



VARA, set up in March of this year, oversees virtual asset regulation via a licensing regime. The regulator is also responsible for developing strategic plans and policies relating to digital assets in the region, as well as establishing and overseeing know-your-customer checks and anti-money laundering rules.



It also became the world&#8217;s first regulator in May to establish a presence in the <a href="https://mediaoffice.ae/en/news/2022/May/03-05/Dubai-Virtual-Assets-Regulatory-Authority-becomes-world-first" target="_blank" rel="noreferrer noopener">metaverse</a> as a means of increasing accessibility to stakeholders.



With provisional approval now in hand, the custodian said it would open an office in Dubai for use as a regional headquarters in the Middle East. 



The move follows the custodian&#8217;s recent and first significant raise, an <a href="https://cms.blockworks.co/hex-trust-raises-88m-in-series-b-to-expand-into-europe-middle-east/" target="_blank" rel="noreferrer noopener">$88 million</a> Series B funding round in March, where funds were put toward scaling its operations in the Middle East and Europe.



Crypto firms continue to flock to the major Arab emirate following Dubai&#8217;s head, Sheikh Mohammed bin Rashid Al Maktoum, passing the &#8220;Regulation of Virtual Assets in the Emirate of Dubai&#8221; in February.



Better known as the Virtual Asset Law, the regulation sets about providing clear guidelines and definitions regarding digital assets, including NFTs (non-fungible tokens).



Several major crypto firms including <a href="https://cms.blockworks.co/ftx-granted-crypto-license-with-dubai-hq-in-sights/" target="_blank" rel="noreferrer noopener">FTX</a>, <a href="https://cms.blockworks.co/binance-granted-license-to-operate-in-dubai/" target="_blank" rel="noreferrer noopener">Binance</a>, <a href="https://cms.blockworks.co/crypto-com-secures-provisional-approval-to-open-crypto-exchange-in-dubai/" target="_blank" rel="noreferrer noopener">Crypto.com</a>, Bybit and <a href="https://cms.blockworks.co/kraken-receives-abu-dhabis-first-virtual-asset-exchange-license/" target="_blank" rel="noreferrer noopener">Kraken</a> have recently established regional headquarters or received licenses to operate in the United Arab Emirates.



&#8220;Hex Trust is excited and fully committed to expanding into the Middle East and sees enormous potential for digital asset growth given the progressive regulations, welcoming governments and thriving crypto ecosystem in the region,&#8221; Filippo Buzzi, Hex Trust&#8217;s regional director for the Middle East and North Africa, said in the statement.



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Hex Trust Greenlit for Virtual Asset License in Dubai

David Canellis

<div id="highlights-block_629926fb89b89" class="highlights">
 <ul>
 <li>Singaporean exchange Crypto.com has furthered its commitment to servicing Dubai’s burgeoning digital asset ecosystem</li>
 <li>Unlike Binance and Bybit, the firm won’t be moving its headquarters to the emirate</li>
 </ul>
 
</div>



Crypto.com has secured critical government approval to expand into Dubai, joining a string of top crypto exchanges given the greenlight to launch localized platforms in the region.



The Singapore-headquartered exchange first received provisional approval of its Virtual Asset MVP License from the Dubai Virtual Assets Regulatory Authority (VARA).&nbsp;



The government <a href="https://cms.blockworks.co/dubai-is-the-latest-government-to-roll-out-crypto-law-set-up-regulator/" target="_blank" rel="noreferrer noopener">launched</a> VARA — which oversees crypto trades and new product issuances — in March.



Crypto.com shared plans to set up a regional outpost in Dubai just three weeks after VARA’s inception. The firm plans to eventually provide a full suite of crypto exchange products and services, including offerings geared toward institutional investors, the firm told Blockworks.&nbsp;



In February, Dubai issued its first law specifically regulating digital assets. It prohibits anyone in Dubai from engaging in digital asset dealings without VARA’s prior authorization – including running crypto exchanges and overseeing custodial solutions.&nbsp;



The law also requires crypto companies looking to do business in the region to incorporate in Dubai, which explains Crypto.com’s <a href="https://www.reuters.com/business/finance/uae-crypto-push-sees-bybit-cryptocom-announce-dubai-offices-2022-03-28/" target="_blank" rel="noreferrer noopener">recent move</a> to open a regional office.&nbsp;



All approved crypto operators must operate within Dubai’s strict market model of testing, adapting then scaling. Initially, only limited exchange products and services can be rendered to pre-qualified investors and professional finance service providers. VARA then monitors the markets before deciding whether to open them to retail investors.&nbsp;



So far, no regulated crypto exchange offers crypto-to-dirham trading pairs in the UAE, with Kraken <a href="https://www.cnbc.com/2022/04/25/crypto-exchange-kraken-to-launch-in-uae-after-full-regulatory-approval.html" target="_blank" rel="noreferrer noopener">pegged</a> to be the first to do so sometime in the near future. Crypto.com declined to comment on its initial crypto offerings.&nbsp;



Indeed, Crypto.com&#8217;s operating license is conditional — until it meets certain mandated requirements. VARA gave the company a conditional go-ahead based on documents outlining Crypto.com’s assurance of compliance checks, pending further due diligence.



“We are excited to provide more of our products and services in a market of great importance to our business, and one that is equally committed to regulation and compliance,” Crypto.com co-founder and CEO Kris Marszalek said in a statement.&nbsp;



Helal Saeed Almarri, director general of the Dubai World Trade Centre Authority (DWTCA), which oversees VARA, called Crypto.com “one of the anchors partnering with VARA in the development of a global, future-focused regulatory framework.”



Last December, DWTCA established a crypto hub in the Dubai World Trade Centre – a government-run exhibition and events facility – which exchange Binance quickly joined. The idea is to give crypto companies a controlled environment in which to set up.



Multiple major crypto players have now secured approval to provide services in the United Arab Emirates (UAE). FTX Europe and Binance <a href="https://cms.blockworks.co/binance-granted-license-to-operate-in-dubai/" target="_blank" rel="noreferrer noopener">both</a> <a href="https://cms.blockworks.co/ftx-granted-crypto-license-with-dubai-hq-in-sights/" target="_blank" rel="noreferrer noopener">acquired</a> VARA’s Dubai-focused license in March – the latter pledged to move its headquarters to the region shortly after.&nbsp;



Singaporean crypto derivatives platform Bybit – which is joining Binance in relocating its headquarters to Dubai – also gained VARA approval in April. Crypto hedge fund firm Three Arrows Capital is likewise <a href="https://cms.blockworks.co/singapore-central-bank-ready-to-try-defi-after-crypto-giants-leave-for-dubai/" target="_blank" rel="noreferrer noopener">making the switch</a> from Singapore to Dubai.



San Francisco-based exchange Kraken, on the other hand, <a href="https://cms.blockworks.co/kraken-receives-abu-dhabis-first-virtual-asset-exchange-license/" target="_blank" rel="noreferrer noopener">opted for</a> neighboring Abu Dhabi, where it received the emirate’s first virtual asset exchange license.&nbsp;



In any case, Crypto.com formally joining the mix (albeit without relocating its headquarters) proves the UAE is well on its way to becoming a global hub for digital assets – although one that’s very closely regulated.



Crypto.com, founded in 2016, has more than 50 million users worldwide.



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Crypto.com Secures Provisional Approval To Open Crypto Exchange in Dubai

Casey Wagner

<div id="highlights-block_62717216df8e7" class="highlights">
 <ul>
 <li>VARA did not provide details about when MetaHQ will be accessible to users or information about the cost of the digital land</li>
 <li>The US is also expanding its crypto regulatory presence by adding 20 positions to its SEC watchog unit</li>
 </ul>
 
</div>



Dubai’s cryptocurrency regulator has become the first such national watchdog to acquire land in the metaverse with plans to establish a virtual headquarters.



Dubai’s Virtual Assets Regulatory Authority (VARA) will create its “MetaHQ” using The Sandbox metaverse platform, according to a Tuesday <a href="https://www.wam.ae/en/details/1395303044162" target="_blank" rel="noreferrer noopener">statement</a> from VARA to the WAM news agency.&nbsp;



MetaHQ plans to provide digital users access to regulatory resources within the virtual environment, something that will become increasingly important as digital presence increases, the statement said.&nbsp;



&#8220;By expanding VARA’s resources to a borderless audience through the Metaverse, Dubai is creating a prototype Decentralised Regulator Model, inviting international thought leaders &#8211; global authorities, governance custodians, and industry shapers &#8211; to participate, exchange knowledge, and problem-solve collectively so that we enable the dynamic virtual assets sector to build economic resilience, accelerate social inclusion, and address environmental sustainability,” Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum said in the statement.&nbsp;



The development comes as the United States likewise moves to increase regulatory oversight of digital assets — albeit in the physical world.



The SEC <a href="https://www.sec.gov/news/press-release/2022-78" target="_blank" rel="noreferrer noopener">announced Tuesday</a> that it will be adding 20 members to the unit responsible for protecting investors in crypto markets and from cyber-related threats.&nbsp;



The newly renamed Crypto Assets and Cyber Unit, formerly known as the Cyber Unit, will now have 50 team members, including the new hires, the SEC said.&nbsp;



&#8220;The U.S. has the greatest capital markets because investors have faith in them, and as more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them,&#8221; SEC Chair Gary Gensler said in a statement.&nbsp;



The new SEC positions will focus on regulating cryptocurrency exchanges, lending and staking, non-fungible tokens (NFTs) and more.



VARA did not provide details about when MetaHQ will be accessible to users or information about the cost of the digital land.



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