US-based crypto exchange Kraken has been granted a Financial Services Permission [FSP] license from the Abu Dhabi Global Market [ADGM] to operate as a regulated exchange platform in the United Arab Emirates [UAE].
For those unfamiliar, ADGM is a free zone for financial entities to do business in the UAE capital and provide services to users within the region. According to a press release, Kraken would cater to the needs of the Middle East and North Africa [MENA] region.
Kraken met all the required criteria from the Financial Services Regulatory Authority [FSRA] of ADGM to operate as a digital asset Multilateral Trading Facility [MTF] and Custodian in Abu Dhabi and the wider UAE, the release added.
Elated over the development, Curtis Ting, Kraken’s managing director for Europe, the Middle East, and Africa, stated in an interview,
“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.”
Kraken says this is a first-of-its-kind full-fledged financial license from ADGM which the trading platform aims to capitalize on by providing seamless access to cryptocurrencies through regulated funding, trading, and custodial services in the local currency dirhams.
In terms of why so many crypto firms are flocking to the region, Ronit Ghose, global head of fintech and digital at Citi cited “greater regulatory clarity” as the reason behind the influx of cryptocurrency businesses in Dubai and Abu Dhabi.
Kraken sees the UAE as one of the most lucrative markets
Kraken, founded in 2011, operates in over 60 nations, said the UAE launch marks its entry into an increasingly lucrative region. According to Chainalysis, the Middle East is one of the fastest-growing cryptocurrency markets in the world, making up 7% of global trading volumes.
The UAE transacts roughly $25 billion worth of cryptocurrency each year. It ranks third by volume in the region, behind Lebanon [about $26 billion] and Turkey [$132.4 billion] as per Chainalysis data studied between July 2020 and June 2021.
With the latest approval, Kraken joins several exchanges setting up shop in the UAE amidst stricter rules and tighter regulations for crypto businesses worldwide.