Nexo's entity based in Dubai, Nexo Services FZE, has secured the initial approval from Dubai's Virtual Assets Regulatory Authority (VARA) to offer lending, borrowing, investment, and broker-dealer services for virtual assets. This marks the digital asset platform's entry into Dubai's crypto space.
Kalin Metodiev, the Co-Founder and Managing Partner at Nexo, mentioned: "Nexo is enthusiastic about the pursuit of new market strategies aligned with the transformative guidance of Dubai's Virtual Asset Regulatory Authority."
Nexo's Global Expansion
Dubai established the VARA in 2022, highlighting the region's commitment to becoming a global hub for digital asset innovation. For Nexo, with its user base of 7 million, Dubai represents a significant opportunity in its global expansion plans.
VARA regulates virtual assets across the Emirate of Dubai, including Special Development Zones and Free Zones but excluding the Dubai International Financial Centre. This entity plays an important role in creating legal frameworks for protecting investors and establishing international standards for the virtual asset industry.
Recently, Nexo launched a legal offensive against the Republic of Bulgaria, filing an arbitration claim exceeding $3 billion. The claim stems from what Nexo termed unjust and politically motivated interferences by Bulgarian authorities, disrupting crucial deals and causing significant financial harm.
Nexo's pursuit of justice followed the dismissal of criminal charges against its leadership, including Kosta Kantchev, Antoni Trenchev, Kalin Metodiev, and Trayan Nikolov. The company's collaborations with investment banks for a funding round and an IPO valued between $8 and $12 billion were disrupted. Moreover, a strategic partnership with a major European football club was abruptly halted.
Defying Regulatory Hurdles
Last year, Nexo was forced to cease certain services for its users in the UK. The company made this decision due to the mandate of the Financial Conduct Authority (FCA). These regulations compelled Nexo to phase out cashback payouts and referral programs.
As part of the compliance measures, Nexo discontinued cashback payouts for transactions on its exchange and Nexo Card. Besides that, the firm ended its referral and affiliate programs.
Nexo's actions reflected a response to the FCA's regulatory mandates by the broader industry. Notably, other financial firms, including PayPal, Luno, and Bybit, have adjusted their services in the UK. For instance, PayPal temporarily suspended cryptocurrency sales to its users in the UK for at least three months, starting October 1 2023.
