Backpack, the crypto wallet company, has announced that it has secured operational licenses across several jurisdictions worldwide within the past five months. The Dubai Virtual Assets Regulatory Authority (VARA) has granted a Virtual Asset Service Provider (VASP) license to Backpack, leading to the launch of Backpack Exchange.
This license issued by VARA allows Backpack to provide crypto exchange services specifically within the Dubai region. However, it does not extend to the offering of Backpack’s other virtual asset products and services. The Backpack Exchange features several notable functionalities, including zero-knowledge (ZK) proof-of-reserves, multi-party computation (MPC) for custody, and low-latency order execution.
Sign up for the waitlist https://t.co/44tITBLJSA 🎒 https://t.co/Wy5zQQLLumpic.twitter.com/aTE9FqmyJ3
— Backpack 🎒 (@xNFT_Backpack) October 31, 2023
The recent announcement revealed that Backpack Exchange has successfully secured operational licenses in multiple jurisdictions around the world over the past five months. Currently, the flagship product, Backpack Wallet, operates without specific regulations. However, it is designed with the intention of helping users transition from fiat to on-chain applications in the future.
Armani Ferrante, CEO and co-founder of Backpack, emphasized his commitment to bringing greater transparency to the crypto exchange sector. He expressed the need to move away from the norm of running crypto exchanges with a single point of failure and without proof-of-reserves or auditability. Utilizing advanced cryptographic techniques such as zk-proofs, MPC, and state machine replication, Backpack Exchange aims to elevate transparency and compliance, setting new standards for the industry.
Backpack and Mad Lads users who are already using the platform will be granted initial access to the Backpack Exchange starting from November 2023, with the public launch planned for Q1 2024. During this period, Backpack intends to expand its offerings by incorporating various trading functionalities such as derivatives, margin trading, and cross-collateral options.
In the regulatory landscape, the Dubai VARA has been actively issuing operational licenses to several crypto exchanges over the past year. This has further solidified Dubai’s reputation as a crypto-friendly jurisdiction. In February 2023, VARA introduced new guidelines for VASPs operating within the emirate, emphasizing compliance with marketing, advertising, and promotion regulations.
Violations may result in fines ranging from 20,000 UAE dirhams ($5,500) to 200,000 dirhams ($55,000), while repeat offenders could face fines as high as 500,000 dirhams ($135,000).