Dubai could become the world’s next crypto capital soon.
Bybit, a cryptocurrency exchange based in Singapore, announced earlier this week that it will relocate its headquarters to Dubai and begin operations as early as April.
In a second announcement, Crypto.com, a Singapore-based crypto exchange, stated it will create a regional hub in Dubai and would begin a significant recruitment drive in the coming months. The exchange claims to have a customer base of 10 million people across 90 countries.
In a statement, Thani Al Zeyoudi, United Arab Emirates minister of state for foreign trade and minister in charge of talent attraction and retention, said on March 28: “Bybit’s decision to open its global headquarters in Dubai is a milestone in our efforts to position the UAE as a global digital hub.”
“To stay ahead in this fast-changing industry, we are building a business-friendly ecosystem with robust regulations to attract, retain and enable high-growth companies,” he said.
The two cryptocurrency exchanges are the most recent additions to a growing league of crypto-related businesses expanding their operations in Dubai.
However, crypto firms aren’t the only ones that have been targeted by Dubai. While Western countries have imposed sanctions aimed at harming Russia’s economy and its wealthy individuals, Dubai has welcomed affluent Russian investment.
According to reports, at least 38 businessmen, linked to Russian President Vladimir Putin, own villas in the emirate for a total of $314 million. The number of Russians looking for property in Dubai has increased as a result of the increased sanctions.
The emirate recently granted virtual asset licences to Binance, the world’s largest crypto exchange, and FTX Europe, the European affiliate of the Bahamas-based cryptocurrency exchange. The licence allows the companies to legally operate in Dubai. On March 15, FTX Europe announced the opening of regional headquarters in Dubai.
In March, Dubai implemented regulations that are likely to have aided in the recruitment of crypto firms.
The government of Dubai has formed the Virtual Asset Regulatory Authority to monitor the virtual asset market. This move comes as other countries, such as Singapore, have recently attempted to regulate some areas of the cryptocurrency industry.
In January, Singapore, where Bybit was formerly based, imposed guidelines prohibiting crypto firms from advertising their services to the general public, claiming that crypto was extremely risky and “not suitable for the general public".
After increasing sanctions on Russia, Western countries, like the United States, have been wary of the relationship between Russians and crypto-assets. Western governments have signalled that cryptocurrencies could be used to evade sanctions because they can be traded somewhat anonymously and exchanged largely without the participation of banks and other third parties, though industry participants, such as Binance founder Changpeng Zhao, have denied these claims.
The deputy US Treasury Secretary, Wally Adeyemo, has issued a warning to crypto-related companies assisting Russians in avoiding sanctions.
Adeyemo told CNBC in an interview on March 29: “What we want to make very clear to crypto exchanges, to financial institutions, to individuals, to anyone who may be in a position to help Russia take advantage and evade our sanctions: We will hold you accountable.”
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