The Virtual Assets Regulatory Authority of the Emirates has granted preliminary approval to Nexo’s cryptocurrency lending platform’s Dubai subsidiary.
The initial sanction for virtual asset lending and borrowing, management and investment, and broker-dealer services have been granted to Nexo Services FZE, according to an announcement published on March 5 and forwarded to Cointelegraph via email.
After acquiring the preparatory license and final operating license, the organization must complete the necessary procedures to offer the aforementioned crypto services to clients in the region through its mobile and web platforms.
Initial approval was a “stepping stone for our ongoing global expansion, which has resulted in seven million clients worldwide,” according to Kalin Metodiev, managing partner and co-founder of Nexo, in an interview with Cointelegraph. His further statement was:
“Throughout the years, Nexo has demonstrated remarkable growth in its client base, and the only way to achieve this is through our sustainable operations and worldwide licensing, prudent risk management, and institutional-grade security.”
Following its entanglement in the United States, which resulted in the company announcing the wind-down of its yield-bearing Earn Interest offering for U.S. customers and agreeing to pay $45 million in penalties to the Securities and Exchange Commission and the North American Securities Administrators Association for failing to register the product, Nexo has now shifted its focus to the United Arab Emirates.
Antoni Trenchev, co-founder of Nexo, told Cointelegraph, “We are satisfied with this unified resolution, which unequivocally puts an end to all rumors regarding the company’s relations with the United States.” Trenchev further stated that the company could now concentrate on developing financial solutions for its international clientele.
Nexo encountered similar challenges in Bulgaria, ultimately leading to their filing for $3 billion in damages after the retraction of allegations of illicit operations by local authorities.
Allegations that the individual in question coordinated a cryptocurrency lending scheme between 2018 and 2023 were ultimately dropped in December 2023, partly because the nation lacked a definitive legal framework governing cryptocurrency assets.
However, due to its financial centers, Abu Dhabi and Dubai, the United Arab Emirates has become a magnet for global crypto participants due to its transparent regulatory environment and straightforward compliance pathways.
VARA issued a VASP license for exchange services to the Dubai subsidiary of cryptocurrency exchange OKX earlier this year. Nevertheless, while the platform strives to fulfill every regulatory prerequisite, the license must remain active. Activation is anticipated within the next few months.
