Binance in tie-up with Dubai government as questions over headquarters linger

Claudia Chong, The Business Times, 13 December 2021

BINANCE, the world's largest cryptocurrency exchange, will soon sign a memorandum of understanding with the government of Dubai for crypto-related activities, sources with knowledge of the matter said.

Dubai is regarded as one of the potential locations for Binance's global headquarters, along with France. Changpeng "CZ" Zhao, Binance's chief executive and co-founder, bought his first home in Dubai in October.

Zhao told Bloomberg last month that he bought the apartment to show Binance's commitment to the city, which he described as "very pro-crypto".

"The government there is very progressive, and it's a very good business environment," he said.

Singapore was reportedly also considered for Binance's global hub but the exchange's local arm has withdrawn its crypto licence application in the city-state. The Singapore unit on Monday (Dec 13) said it will shut down its operations in the city-state by Feb 13.

Binance is in a race to gain legitimacy following increasing scrutiny from various jurisdictions over concerns about regulatory compliance and potential money laundering.

The exchange, which shot to fame with no known headquarters and licences then, is under pressure to establish a global base soon. The Middle East and Europe have been tipped as potential targets.

While no formal headquarters have been announced, Binance has been strengthening its ties with the United Arab Emirates (UAE), which is pursuing non-oil growth and expanding in fintech and blockchain capabilities. Zhao recently met with the heads of the Dubai Blockchain Center and the Dubai Police's virtual assets crime section.

"We had a fruitful discussion on opportunities, innovation, talent and investment that Binance can bring to the UAE in line with the UAE Next 50 national strategy that was inaugurated by the Government last year," Binance's former director for the Middle East and North Africa, Omar Rahim, said in a LinkedIn post two months ago.

Richard Teng, who maintains ties with the UAE after six years leading the Financial Services Regulatory Authority at Abu Dhabi Global Market, joined Binance's ranks in August to lead the exchange's Singapore arm.

In response to queries from BT, a Binance spokesperson said: "Binance is establishing in multiple jurisdictions globally. We are having meaningful conversations with governments, governmental agencies and key stakeholders in various markets. We do not comment or speculate on the issue of headquarters. When appropriate, we will release official statements to keep the community informed of developments."

Despite withdrawing its crypto licence application in Singapore, Binance has made moves to try to anchor itself in the financial hub known for its world-class regulatory standards.

Its Singapore unit took an 18 per cent stake in Singapore-regulated private securities exchange Hg Exchange, though the acquisition is still subject to regulatory requirements. Binance has been shopping around for a stake in Singapore-regulated platforms since as early as the third quarter of this year, industry sources told The Business Times.

In July, Binance was revealed to have given up its stake in cryptocurrency derivatives exchange FTX after FTX announced a US$900 million fundraise, but with Binance missing from its list of investors. Binance made the strategic investment in 2019, with plans to help build each other's platforms.

Separately, Binance said on Monday it will set up a blockchain innovation hub in Singapore, exploring initiatives such as incubation programmes, blockchain education and further investment opportunities.

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