Dubai is intensifying its examination of cryptocurrency license applicants, such as Binance BNB/USD, in light of last year's FTX FTT/USD bankruptcy, demanding more details from companies seeking permits, according to a report.
Dubai's Virtual Assets Regulatory Authority (VARA) has recently requested information from Binance on its ownership structure, governance and auditing procedures, Bloomberg reported, quoting sources.
Similar details are being sought from all international firms applying for permits.
The increased scrutiny by Dubai could pose challenges for Binance CEO Changpeng Zhao, who is based in Dubai and has plans to expand in the Middle East, as he faces mounting pressure from U.S. regulators.
Dubai is attempting to strike a balance between fostering innovation and ensuring proper oversight in an industry that has seen numerous scandals in the past year.
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In March, the U.S. Commodity Futures Trading Commission filed a lawsuit against Binance and Zhao, accusing them of violating derivatives regulations and alleging the company had "sham" compliance procedures.
Binance has described the lawsuit as "unexpected and disappointing."
In response to questions from Bloomberg, Binance said it has proactively provided all necessary information to VARA in accordance with its regulatory and fiduciary responsibilities.
The company also confirmed that it has shared details about its local entity's ownership structure and external auditor. VARA representatives did not respond to requests for comment.
According to the sources, VARA officials are also seeking information on Binance's global group-level ownership, auditing and board procedures.
Due to Binance's size and complexity, these inquiries are taking longer to resolve. Binance has a complex corporate structure, with several holding companies and local entities, and a global advisory board instead of a traditional board of directors.
Read Next: Binance's Nightmare: Can A $1B Crypto Deal Survive A Legal Battle With The CFTC?
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