The cryptocurrency exchange giant Binance has recently withdrawn its application for certain operations in Abu Dhabi. The Abu Dhabi Global Market (ADGM) regulator confirmed that the withdrawal took effect on November 7, 2023. This decision marks a significant shift in Binance’s strategy, as the company seemed to be focusing on expanding its presence in the Middle East and North Africa (MENA) region.
According to Binance, ADGM granted permission for the exchange to manage a collective investment fund. However, there are strict conditions attached to this permission. Binance is required not to hold or control client assets and is prohibited from serving retail clients. Additionally, ADGM has allowed Binance to offer custody services, but the details of this arrangement remain undisclosed.
Binance’s decision to withdraw its application comes as a surprise, considering the company’s previous plans and efforts to become a full broker-dealer in Abu Dhabi. In April 2022, Binance received preliminary approval for operating as a broker-dealer, and at that time, the company was aggressively hiring over 100 positions in the area. This sudden change in direction indicates a shift in Binance’s global licensing strategy.
Binance emphasized that the withdrawal of the Abu Dhabi application was a result of careful assessment of their licensing needs. The company stated that it deemed the application unnecessary, given Abu Dhabi’s status as a leader in the virtual and digital assets ecosystem. Binance praised Abu Dhabi as a global hub that fosters innovation while protecting the interests of users.
Despite the withdrawal in Abu Dhabi, Binance maintains its commitment to working with regulators, not only in the Middle East but also worldwide. The company’s spokesperson affirmed their dedication to responsible growth and cooperation with regulatory authorities. However, the spokesperson did not explicitly clarify whether Binance’s retail services are currently or will be available in Abu Dhabi.
In a separate report, Binance clarified that the withdrawal of the application in Abu Dhabi is unrelated to the recent settlement reached with various U.S. agencies. This settlement coincided with the resignation of the company’s CEO, Changpeng Zhao. The withdrawal of the application was initiated by a Binance unit called BV Investment Management, as confirmed by the company’s website.
Binance’s withdrawal of its application for certain operations in Abu Dhabi raises questions about the company’s strategic direction. This decision signifies a shift in focus away from the MENA region and emphasizes the importance of regulatory compliance for Binance’s global operations. While the withdrawal may have been deemed unnecessary, it remains to be seen how this will impact Binance’s future plans and services in Abu Dhabi and the broader cryptocurrency market.