Crypto exchange Kraken to launch in UAE after full regulatory approval

Crypto exchange Kraken to launch in UAE after full regulatory approval

ABU DHABI, United Arab Emirates — U.S. cryptocurrency exchange Kraken is increasing into the Center East and can open its regional headquarters in Abu Dhabi after receiving a full license to function a regulated buying and selling platform in the UAE.

“We’re incredibly excited to be able to set up our operations right in the ADGM [Abu Dhabi Global Market] itself to operate a virtual asset platform that finally offers Dirham pairs for investors in the region,” Curtis Ting, Kraken’s managing director for Europe, the Center East and Africa, instructed CNBC’s Dan Murphy.

Kraken will change into the primary cryptocurrency exchange to supply direct funding and buying and selling in UAE dirhams in opposition to bitcoin, ether and a variety of different digital belongings, after gaining regulatory approval from the ADGM and Monetary Providers Regulatory Authority for its native launch.  

“For us, it’s really important to facilitate access to global markets and global liquidity by making sure that investors and traders in the region have access to local currencies,” Ting mentioned. 

Kraken, which launched in 2011 and operates in over 60 nations, mentioned the UAE launch marks a wider play into an more and more profitable area. The Center East is likely one of the fastest-growing cryptocurrency markets in the world, making up 7% of global trading volumes, in accordance to Chainalysis. 

The UAE transacts roughly $25 billion price of cryptocurrency every year. It ranks third by quantity in the area, behind Lebanon (about $26 billion) and Turkey ($132.4 billion), in accordance to Chainalysis knowledge studied between July 2020 and June 2021. 

“One of the reasons we see an influx of entrepreneurs, builders, operators and developers coming into Abu Dhabi and Dubai … is because there is a sense of greater regulatory clarity at ADGM, in Dubai, and at a federal level,” Ronit Ghose, world head of fintech and digital at Citi, instructed CNBC’s “Capital Connection” on Thursday.  

“It’s frankly amazing some of the talent the UAE has attracted in the last 12 to 24 months during COVID,” Ghose mentioned. “Is it really beginning to establish itself as both a crypto hub and a Web3 hub.” 

Extra competitors

Binance, the world’s largest crypto exchange by buying and selling quantity, is amongst these additionally contemplating an even bigger presence in the Center East, the place cryptocurrency buying and selling is changing into more and more mainstream. 

Binance was given approval to operate in Abu Dhabi in recent weeks, and will recruit for over 100 positions in the country. Fellow exchange Bybit was also given approval to open a headquarters in Dubai last month, while FTX also received a virtual-asset license in Dubai and will set up a regional headquarters soon. 

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Rival financial centers in Singapore and Hong Kong are also hoping to create fully regulated environments for cryptocurrency trading, seeking to deepen regulatory mechanisms to attract investment and trading volumes in an increasingly competitive landscape. 

‘Gray list’

But while the Emirates might be winning over some of the world’s largest crypto companies, it’s also coming under increasing international scrutiny for not doing sufficient to crack down on so-called soiled cash flows. Current experiences declare that crypto corporations in the UAE have been deluged with requests to liquidate billions of {dollars} of digital foreign money, as Russians search a secure haven for his or her fortunes, together with inside Dubai’s property market, amid the battle in Ukraine.

Final month, the world’s foremost anti-money laundering watchdog, the Monetary Motion Activity Power, additionally positioned the UAE on its “gray list” of nations that want additional monitoring. The UAE joins Syria, Turkey and Panama in an inventory of nations which, in accordance to the FATF, want to tackle money-laundering threats.

“It is important for us to pay attention to AML (anti money laundering) to KYC (know-your-customer) and other important compliance matters,” Ting instructed CNBC.

“I think trust needs to be placed in the controls that regulators are putting in place to make sure that if a consumer is going to be exposed and have access to platforms that offer cryptocurrencies, they’re doing so in a way that there’s some accountability.” 

Correction: This story has been up to date to appropriate the job title of Ronit Ghose.

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