OKX, a prominent cryptocurrency exchange, has officially launched its AED-denominated trading service in the United Arab Emirates (UAE) following full regulatory approval from the Virtual Assets Regulatory Authority (VARA). This marks a significant milestone as OKX becomes the first major exchange in the region to provide accessible AED services for both retail and institutional investors, along with regulated derivatives trading.
The new trading platform will not only feature AED banking but also an AED order book, allowing users to transact directly in the local currency. This integration positions OKX at the forefront of the UAE's crypto landscape, providing users with a seamless trading experience tailored to their needs.
However, the exchange's derivative trading services will be exclusive to eligible traders and institutional investors who meet specific criteria. OKX has implemented strict requirements to ensure that only qualified users gain access to these advanced trading options.
To participate in derivatives trading, users must complete a knowledge test and a suitability assessment, proving their understanding of the trading environment. Additionally, they are required to submit documentation demonstrating that they possess a minimum of 500,000 AED (approximately $136,000) in liquid assets, which must be maintained for a “reasonable” period, although the exact duration remains unspecified.
Institutional investors face their own set of requirements, including compliance with Know Your Customer (KYC) regulations. They must also meet at least two of the following three liquidity criteria:
Rifad Mahasneh, OKX’s general manager for the Middle East, expressed the exchange's dual focus: “We have two targets – to be the retail app of choice in the market and to convert traditional institutions in the UAE to enter the space.” Mahasneh believes that the return on investment will be driven by their ability to attract conventional financial institutions into the cryptocurrency arena.
With the launch, OKX aims to offer an extensive range of options, providing access to 280 tokens and 400 trading pairs in the region. This comprehensive suite of services is designed to cater to the diverse needs of both retail and institutional investors.
The regulatory landscape for cryptocurrency exchanges in the UAE has evolved significantly since July 2023, when exchanges were mandated to obtain licenses from VARA to operate in Dubai. Notably, Binance received full regulatory approval in April 2024, signaling its intention to transition all UAE residents to its local platform, Binance FZE, by December 15, 2024.
Similarly, Crypto.com has also secured its full license from VARA and is collaborating with Standard Chartered to enhance its offerings in the region. The presence of these major players underscores the UAE's growing reputation as a hub for cryptocurrency trading.
OKX's launch of AED-denominated trading services in the UAE is a pivotal development in the region's cryptocurrency market. With regulatory approval from VARA, the exchange is well-positioned to meet the demands of both retail and institutional investors. As the crypto landscape continues to evolve, the commitment to compliance and user education will be crucial in fostering trust and encouraging wider adoption of digital assets in the UAE.
October 2024, Cryptoniteuae