A cryptocurrency exchange has recently obtained In-Principle Approval (IPA) from the Securities & Commodities Authority (SCA) of the United Arab Emirates, allowing it to operate as a Virtual Asset Platform Operator. This approval, dated February 18, 2025, follows a significant security incident in which the exchange reportedly lost over $1.4 billion in liquid-staked Ether and MegaETH.
The IPA is a crucial preliminary endorsement that paves the way for the exchange to secure a full operational license within the UAE. With this license, the exchange plans to provide digital asset services to both retail and institutional clients in the region. The UAE has been characterized as a vital financial hub, thanks in part to its supportive regulatory framework, which enhances cryptocurrency and blockchain adoption.
The exchange has emphasized its commitment to adhering to global compliance standards, including Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) regulations. These measures are essential for maintaining the integrity of operations and building trust with users.
In addition to its recent approval in the UAE, the exchange has acquired regulatory approvals in various jurisdictions, including India, Georgia, Kazakhstan, and Turkey. These initiatives align with its overarching strategy of expanding services while ensuring compliance with local regulations.
Amidst the backdrop of the security breach that led to the loss of substantial funds, the exchange’s management stated that it has successfully restored the missing Ether and is in the process of preparing an audited proof-of-reserves report to reassure users about the platform’s stability. Furthermore, in response to the breach, the exchange has rolled out a $140 million bounty program to gather information related to the attack, which is believed to involve sophisticated hacking groups.
Despite facing challenges, the exchange remains focused on fostering a compliant and innovative digital asset ecosystem tailored for diverse investor needs in the UAE market. The acquisition of the IPA is viewed as a significant step in reinforcing its position and facilitating further expansion in the rapidly evolving crypto space.