UAE's Regulatory Clarity Attracts Bybit's Landmark License

Bybit has become the first cryptocurrency exchange to secure a Virtual Asset Platform Operator License from the United Arab Emirates' Securities and Commodities Authority (SCA), marking a significant regulatory milestone. The license, announced on October 9, 2025, enables Bybit to offer regulated virtual asset trading, brokerage, custody, and fiat conversion services across the UAE mainland, expanding its operations beyond Dubai's VARA jurisdiction [1]. This approval follows an In-Principle Approval (IPA) granted in February 2025, during which Bybit collaborated with the Blockchain Centre Abu Dhabi to meet SCA requirements [2].

The SCA license grants Bybit access to a broader regulatory framework that covers the UAE mainland, complementing its provisional license under Dubai's Virtual Assets Regulatory Authority (VARA). This dual regulatory coverage positions Bybit as a key player in the UAE's fragmented crypto landscape, where Dubai's VARA governs free zones and the SCA oversees mainland operations [3]. The exchange plans to establish a regional operations center in Abu Dhabi, employing over 500 staff across compliance, operations, and customer service roles, while launching educational and Web3 innovation programs with local partners [4].

The licensing achievement occurs amid lingering scrutiny over a $1.4 billion Ether hack in February 2025, attributed to the Lazarus Group. The breach, which occurred during a transfer between Bybit's cold and hot wallets, remains one of the largest security incidents in crypto history [5]. Despite the incident, Bybit has continued its global expansion, securing regulatory approvals in Austria, India, and now the UAE. The SCA license is seen as a testament to the exchange's "unwavering commitment to compliance and transparency," according to CEO Ben Zhou, who emphasized the UAE's role as a global leader in digital asset regulation [6].

The UAE's crypto adoption has surged, with the region ranking first in the 2025 global crypto adoption index after a 210% growth rate. Between July 2023 and June 2024, the UAE processed over $30 billion in crypto transactions, driven by regulatory clarity and institutional interest [7]. Dubai's VARA has enforced strict penalties, fining 19 unlicensed crypto firms between $27,000 and $163,000, while major exchanges like Crypto.com and HashKey Group have secured licenses to operate in the emirate. The SCA's approval for Bybit underscores the UAE's ambition to solidify its position as a hub for compliant crypto innovation, with plans to issue a blockchain-backed Digital Dirham by late 2025 [8].

Bybit's SCA license also aligns with its broader regulatory strategy, including a Markets in Crypto-Assets (MiCA) license in the European Union and renewed operations in India after paying a $1.06 million penalty for prior violations. The exchange's expansion in the UAE follows a pattern of securing licenses ahead of market entry, a strategy that addresses institutional demand for regulatory certainty [9]. Analysts note that the UAE's fragmented regulatory environment-distinguishing between mainland and free zone jurisdictions-presents both opportunities and challenges for global exchanges, requiring careful navigation of overlapping compliance frameworks [10].

The approval reflects the UAE's proactive stance in attracting crypto firms, with state-backed entities like Abu Dhabi Global Market unveiling tailored regulations for blockchain foundations and decentralized autonomous organizations. Tether's recent announcement of a dirham-pegged stablecoin and venture capital inflows further highlight the region's growing appeal. However, the SCA license's broader implications remain tied to Bybit's ability to rebuild trust post-hack, a challenge that will test the exchange's long-term resilience in a rapidly evolving market [11].

Source: [1] Cryptonews.com (https://cryptonews.com/news/bybit-becomes-first-crypto-exchange-to-secure-uae-sca-virtual-asset-license/)

[2] Coindesk (https://www.coindesk.com/business/2025/10/09/bybit-snags-uae-s-virtual-asset-platform-operator-license-from-securities-and-commodities-authority)

[3] Coinotag (https://en.coinotag.com/bybit-could-expand-uae-services-after-sca-license-amid-lingering-concerns-over-1-4-billion-ether-hack/)

[4] Coincentral (https://coincentral.com/bybit-becomes-first-exchange-to-gain-uaes-full-sca-crypto-license/)

[5] Tradersunion.com (https://tradersunion.com/news/cryptocurrency-news/show/632989-uae-grants-bybit-full-virtual-asset-service-provider-license/:~:text=While%20Bybit%20previously%20held%20a%20temporary%20license%20from,which%20regulates%20virtual%20asset%20activities%20only%20within%20Dubai)

[6] Livebitcoinnews.com (https://www.livebitcoinnews.com/exchange-news-bybit-secures-first-crypto-exchange-license-by-uae-sca/)

[7] Cryptorank.io (https://cryptorank.io/news/feed/d8999-bybit-becomes-first-crypto-exchange-to-secure-uae-sca-virtual-asset-license)

[8] Yahoo Finance (https://finance.yahoo.com/news/first-uae-bybit-snags-sca-180204447.html)

[9] Tecronet.com (https://tecronet.com/bybit-secures-landmark-uae-virtual-asset-license-cementing-middle-easts-crypto-leadership/)

[10] Watcher.guru (https://watcher.guru/news/bybit-becomes-the-first-licensed-crypto-exchange-in-the-uae)

[11] Marketpulse (https://marketpulse.com/bybit-secures-landmark-uae-virtual-asset-license-cementing-middle-easts-crypto-leadership/)