The Backpack crypto wallet has secured operational licenses across multiple global jurisdictions within the last five months. This has culminated in a significant development—the launch of Backpack Exchange in Dubai.
Dubai VARA Greenlights Backpack Exchange
The Dubai Virtual Assets Regulatory Authority (VARA) has granted a Virtual Asset Service Provider (VASP) license to Backpack, heralding the emergence of Backpack Exchange. This license exclusively covers crypto exchange services in Dubai. However, it limits the company from extending its offerings beyond the realm of virtual asset products and services.
Boasting advanced features such as zero-knowledge (ZK) proof-of-reserves, multi-party computation (MPC) for custody, and low-latency order execution, Backpack Exchange is poised to redefine the crypto exchange landscape in Dubai.
Global Recognition for Backpack Exchange
Highlighting its global ambitions, the announcement underscores Backpack Exchange’s acquisition of operational licenses across various jurisdictions worldwide over the preceding five months.
Notably, the flagship Backpack Wallet currently operates as an unregulated product. However, Backpack CEO and co-founder Armani Ferrante emphasizes its strategic role in facilitating users’ transition from fiat to on-chain applications. Ferrante expresses a commitment to ending the opacity prevalent in crypto exchanges and challenges the norm by stating:
“Using cryptographic techniques like zk-proofs, MPC, and state machine replication, Backpack Exchange hopes to raise the bar for transparency and compliance to demonstrate the best this technology has to offer. Don’t trust, verify.”
Starting November 2023, existing Backpack and Mad Lads users will enjoy exclusive access to Backpack Exchange. Notably, public access slated for Q1 2024. During this period, Backpack plans to enhance its offerings by introducing various trading functionalities, including derivatives, margin, and cross-collateral.
Dubai VARA’s Crypto-Friendly Stance
This move aligns with Dubai VARA’s strategy of issuing operational licenses to numerous crypto exchanges over the past year. Further, it solidifies its reputation as a crypto-friendly jurisdiction. In February 2023, the regulatory authority introduced new guidelines for VASPs operating within the emirate, reinforcing regulations around marketing, advertising, and promotions.
Violators face fines ranging from 20,000 to 200,000 UAE dirhams ($5,500 to $55,000). However, repeat offenders risk fines as high as 500,000 dirhams ($135,000).