Backpack Exchange Gets Crypto License from Dubai's VARA, Set to Launch in 2024
Summary:
Dubai's Regulatory Authority for Virtual Assets (VARA) has granted a Virtual Asset Service Provider (VASP) license to crypto wallet, Backpack. This permits the launching of Backpack Exchange exclusively for cryptocurrency exchange services in Dubai. Also, over the previous five months, the Backpack exchange has secured operating licenses in numerous global jurisdictions. With an aim to enhance transparency and regulatory compliance in crypto exchanges, the Backpack Exchange incorporates various unique features like zero-knowledge proof of reserves (zk-proofs) and Multi-Party Computation (MPC). This exchange will initially be accessible to existing Backpack and Mad Lads users from November 2023 and to the public in Q1 2024.
The Regulatory Authority for Virtual Assets (VARA) in Dubai has granted a license for Virtual Asset Service Provider (VASP) to crypto wallet, Backpack, paving the way for the introduction of the Backpack Exchange. This license bestowed upon Backpack by VARA is specifically tied to cryptocurrency exchange services in Dubai, and doesn't grant the firm permission to propose its other virtual asset offerings or solutions. The announcement of this exchange by Backpack mentions the inclusion of distinct features such as zero-knowledge evidence of reserves (zk-proofs), Multi-Party Computation (MPC) for safekeeping and swift order execution. It was also made known in the announcement that the Backpack exchange has over the past five months acquired operating licenses in many jurisdictions globally.
Despite being unregulated at present, the premier Backpack Wallet is engineered to facilitate the user's shift from fiat to blockchain applications in the future. Armani Ferrante, CEO and co-founder of Backpack, expressed his commitment to eliminating the obscurity often associated with cryptocurrency exchanges. Counteracting the standard approach of operating comprehensive crypto exchanges with a singular point of failure lacking proof of reserves or audibility, Ferrante maintained: "Backpack Exchange, employing cryptographic methods like zk-proofs, MPC, and state machine replication, aims to elevate transparency and regulatory adherence, showcasing the finest aspects of this technology. Verification take precedence over trust." Existing users of Backpack along with Mad Lads will receive preferential access to the Backpack Exchange from November 2023, with a wider public release planned for the first quarter of 2024. During this period, Backpack intends to expand its services by incorporating a host of trading features such as derivatives, margin and cross-collateral. At the moment, Backpack has not responded to Cointelegraph's request for a comment.
In recent news, Nomura's crypto division, Laser Digital, obtained a VARA license in Dubai. Over the past year, the VARA regulatory body of Dubai has granted varying levels of operational licenses to a multitude of cryptocurrency exchanges, further consolidating its prominence as a crypto-accommodating jurisdiction. In February 2023, this regulator published fresh guidelines for VASPs functioning within the emirate. All crypto exchanges are bound to comply with regulations regarding marketing, publicity and promotional activities. That violations of these norms will attract penalties ranging from 20,000 dirhams ($5,500) to 200,000 dirhams ($55,000), and habitual offenders may face fines as high as 500,000 dirhams ($135,000).
Published At
10/31/2023 10:12:06 AM
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