In a significant move, the Dubai Virtual Assets Regulatory Authority (VARA) has bestowed a Virtual Asset Service Provider (VASP) license upon the cryptocurrency wallet entity, Backpack. This approval heralds the inauguration of Backpack Exchange, exclusively dedicated to crypto exchange services within the confines of Dubai. This regulatory nod is a critical stride in Backpack’s journey towards amplifying transparency across crypto trading platforms.
The newly minted Backpack Exchange is imbued with state-of-the-art cryptographic mechanisms like zero-knowledge proofs and multi-party computation. These technologies are envisioned to eradicate the prevailing opacity often associated with cryptocurrency exchanges. By embedding these advanced cryptographic methodologies, Backpack Exchange is not just elevating the transparency quotient but is also setting a high bar of compliance, thereby embodying the ethos of “Don’t trust, verify” in its operational paradigm.
As part of the initial phase, come November 2023, the existing user base of Backpack and Mad Lads will be ushered onto the Backpack Exchange platform. This preliminary access will serve as a precursor to a broader public launch slated for Q1 2024. During this interim, Backpack Exchange is poised to enrich its trading functionalities by introducing derivatives, margin, and cross-collateral trading options, thereby widening the spectrum of trading instruments available to its patrons.
This development is not just a milestone for Backpack but also underscores Dubai’s growing stature as a crypto-friendly jurisdiction. Over the past year, VARA has been instrumental in fostering a conducive ecosystem by awarding operational licenses to numerous crypto exchanges. These concerted efforts are gradually cementing Dubai’s position on the global crypto map.
Earlier in February 2023, VARA rolled out a fresh set of guidelines for Virtual Asset Service Providers operating within the emirate. These guidelines, emphasizing adherence to marketing, advertising, and promotion regulations, are a testimony to the emirate’s commitment to creating a robust and compliant crypto trading landscape.
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