Nexo Receives Initial Approval from Dubai’s VARA, Expands Global Crypto Services Amid Regulatory Clarity

Nexo Receives Initial Approval from Dubai’s VARA, Expands Global Crypto Services Amid Regulatory Clarity

Crypto News – Cryptocurrency lending platform Nexo is swiftly moving past its challenges in Bulgaria and the United States, with its Dubai branch receiving initial approval from the emirate’s Virtual Assets Regulatory Authority (VARA).

The approval granted to Nexo Services FZE encompasses virtual asset lending and borrowing, management and investment, as well as broker-dealer services, as outlined in a March 5 announcement shared with Cointelegraph via email.

Now, the company faces the task of progressing through subsequent phases — securing a preparatory license followed by the final operating license — to fully roll out its crypto services to regional clients through its mobile and web platforms.

Kalin Metodiev, co-founder and managing partner at Nexo, hailed the initial approval as a significant milestone in the platform’s ongoing global expansion, which has now reached seven million clients worldwide. He emphasized the importance of sustainable operations, worldwide licensing, prudent risk management, and institutional-grade security in achieving such growth.

Nexo’s strategic shift towards the United Arab Emirates comes in the wake of its regulatory issues in the United States. The company recently announced the discontinuation of its yield-bearing Earn Interest offering for U.S. customers, following an agreement to pay $45 million in penalties to the Securities and Exchange Commission and the North American Securities Administrators Association for failing to register the product.

Expressing satisfaction with the resolution, Nexo co-founder Antoni Trenchev stated that it definitively closes speculation about the company’s U.S. ties, allowing them to focus on developing financial solutions for their global clientele.

Bulgaria also posed challenges for Nexo, leading to a $3 billion damages claim after authorities withdrew illicit operations charges. Originally accused of orchestrating a crypto lending scheme from 2018 to 2023, the allegations were dismissed in December 2023, partly due to the country’s lack of a clear legal framework for crypto assets.

In contrast, the UAE, home to financial powerhouses Abu Dhabi and Dubai, is attracting global crypto players with its regulatory clarity and transparent compliance pathways. Earlier this year, OKX’s Dubai subsidiary received a VASP license from VARA for exchange services, though the license remains inactive as the platform works towards meeting regulatory requirements, with plans to activate it in the coming months.