Nexo Secures Preliminary Approval for Crypto Services in Dubai Amid Global Expansion
Summary:
Digital asset lending platform Nexo has received preliminary approval in Dubai from the Virtual Assets Regulatory Authority. This initial approval covers virtual asset lending, management, investment, and broker services. This milestone comes after the company faced regulatory hurdles in the US and Bulgaria. The UAE, with its regulatory clarity, has been attracting international crypto firms.
In an attempt to move past regulatory hurdles in Bulgaria and the US, digital asset loan service Nexo has received preliminary approval for its Dubai branch by the Virtual Assets Regulatory Authority (VARA) in the emirate. Granted to Nexo Services FZE, this initial approval encompasses activities like virtual asset lending as well as management, investment, and brokerage services, as disclosed in a March 5 notification sent to Cointelegraph. To fully provide these cryptocurrency services to customers in the region through its web and mobile platforms, Nexo now has to secure a preparatory and final operating license.
Co-founder and Managing Partner at Nexo, Kalin Metodiev, characterized this initial approval as a critical milestone in their global growth strategy, now with a customer base of seven million worldwide. According to Metodiev, Nexo's remarkable client growth has only been possible because of their sustainable and well-regulated operations, prudent risk management and high-level security.
This development comes after Nexo's problematic regulatory presence in the US, which led to them discontinuing their interest-yielding product for US customers and agreeing to a $45 million penalty payment to the Securities and Exchange Commission and the North American Securities Administrators Association for not registering the product properly.
Antoni Trenchev, Co-founder of Nexo, expressed satisfaction with the resolution, stating that it definitively ends speculations about Nexo's US ties and allows them to concentrate on developing financial solutions for their international customer base.
Meanwhile in Bulgaria, Nexo had to contest a $3 billion damage claim following the the retraction of illegal operation charges by local authorities. Previously accused of running a crypto lending scam from 2018 to 2023, the charges were dropped in December 2023, with part of the reason being the nation's lack of defined legal guidelines for digital assets.
The United Arab Emirates, home to finance hotspots like Abu Dhabi and Dubai, has however been drawing in international cryptocurrency firms with its clear regulation and compliance pathways. Earlier this year, crypto exchange OKX's Dubai subsidiary was granted a VASP license from VARA for exchange services. Even though this license is not yet operative as the platform strives to fulfill all stipulated conditions, it is expected to be activated in the upcoming months.
Published At
3/6/2024 9:40:20 AM
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