Nexo, a leading provider of digital asset services, has achieved initial approval as a licensed entity in Dubai from the Virtual Assets Regulatory Authority (VARA) of the region. This marks a significant milestone for the company as it navigates the regulatory landscape in one of the world’s burgeoning crypto markets.
Approval process progression
Nexo’s regional entity, Nexo DTC, is progressing through the rigorous licensing process, which involves three stages: an initial provisional permit, a preparatory license, and an operating license. The company aims to obtain full approval for various activities, including Lending & Borrowing, Management & Investment, and Broker-Dealer operations.
Dubai’s crypto ambitions
Dubai, the most populous city in the UAE, alongside Abu Dhabi, the nation’s capital, has been actively striving to position itself as a global crypto hub.
The authorities have been keen on attracting financial institutions, signaling a proactive approach to embracing digital assets and blockchain technology.
VARA’s role in regulating the virtual asset space underscores Dubai’s commitment to fostering a conducive environment for crypto-related businesses.
Nexo’s optimism and strategic alignment
Kalin Metodiev, co-founder and managing partner at Nexo, expressed the company’s enthusiasm for exploring new market strategies in alignment with Dubai’s Virtual Asset Regulatory Authority’s guidance.
This indicates Nexo’s commitment to complying with regulatory frameworks while expanding its presence in the region’s burgeoning crypto ecosystem.
Compliance challenges and legal settlements
Notwithstanding its recent success, Nexo has faced compliance challenges in the past. The company agreed to a settlement with the U.S. Securities and Exchange Commission (SEC), agreeing to pay $45 million for failing to register the offer and sale of its Earn Interest Product (EIP).
However, it is noteworthy that Nexo has also pursued legal action against Bulgaria, seeking $3 billion in damages after the nation’s investigation found no evidence against the company, highlighting the complexities of operating in a regulatory landscape that varies across jurisdictions.
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