World’s largest crypto exchange Binance is considering shifting its focus to the Middle East as regulatory pressure is becoming unbearable in Europe and the US. General Manager of Binance Dubai, the United Arab Emirates (UAE), Alex Chehade said the UAE may become the main base for crypto businesses.
According to Chehade, the region is great for crypto businesses to thrive because of favorable and transparent regulations. In addition, he noted that the leadership of the region is willing to develop it and make it a leader in the web3 space, plus its desire to diversify from oil.
These factors contribute to making the UAE an ideal place for crypto companies such as Binance. He mentioned in an interview with Cointelegraph that the Middle East makes laws that are predictable, making it a safe place for crypto exchanges like Binance, unlike places like the US where the ground is always shifting.
This is coming on the heels of a major crackdown on crypto in the US. Binance has been the main focus in this wave of crackdown, not just in the US but all over the world. The only place where Binance still enjoys some level of security is in the UAE, which explains why there is a positive attitude towards the region.
Binance Global CEO Changpeng Zhao had earlier hinted that Binance may build a physical head office in Dubai, one of the biggest commercial cities in the UAE. With the recent trends, it appears as if the proposal may finally come into fruition.
UAE Laws Attracting Crypto
The Virtual Assets Regulatory Authority (VARA) is the regulatory body in charge of cryptocurrencies in the UAE. Unlike the securities and exchange commission in the US which is responsible for the departure of many crypto companies from the US, VARA is directly responsible for making the UAE an attractive destination for crypto companies like Binance.
The agency has released a regulatory framework for the crypto industry that is fair and clear, giving crypto companies clear direction to follow. This makes the region easy for running crypto businesses. This is why most top crypto exchanges in the world have offices in Dubai, or one of the cities in the UAE.
It is therefore not surprising that most crypto holders live in the UAE as indicated by Biance’s statistics. The data shows that 28% of UAE residents hold cryptocurrencies, which is much higher than the global average of about 4.2%.
Binance Overdue for Relocation
Binance has been through a lot with regulators around the world. The challenge with the US has been around for a long time, it was the reason the company had to create a separate exchange – Binance.US – for US residents. Yet, the SEC has come after the exchange this year, dragging it to court.
In Europe, Binance had to exit the Netherlands after failing to secure an operational license, while regulators in Belgium have ordered it to stop offering services in the country. It also had to exit in Canada, the home country of the CEO Changpeng Zhao because of unfriendly regulations.
With these challenges, it looks like Binance is long overdue for a relocation. This is especially important since most of the crypto market which initially was in the west is now moving to the Middle East where the environment is much more favorable.