Do I need a specific license to buy and sell crypto (USDT) on Binance, especially in P2P?

Dear Questioner,

If you are trading cryptocurrencies for personal purposes only, such as personal investment, you are unlikely to need a license.

If you are trading cryptocurrencies commercially or as a source of income, or are acting as a broker or service provider in the cryptocurrency space, you may need a license from the relevant authorities such as the Abu Dhabi Global Market (ADGM), the Dubai International Financial Centre (DIFC), or other regulatory bodies such as the Central Bank of the UAE or the Securities and Commodities Authority (SCA).

The Abu Dhabi Global Market (ADGM) and the Dubai International Financial Centre (DIFC) are the two main platforms for regulating companies operating in the cryptocurrency space and providing financial services related to it.

Yes, you need a license.

Thank you for reaching out regarding your situation!

Here's an overview of the regulatory landscape in the UAE concerning cryptocurrency trading, particularly in relation to your activities on Binance P2P:

1. Regulatory Framework in the UAE:

- Securities and Commodities Authority (SCA):

The SCA regulates crypto asset activities, including trading, within the UAE. According to SCA Decision No. 23 of 2020, entities engaging in crypto asset activities must obtain the necessary licenses.

- Central Bank of the UAE (CBUAE):

The CBUAE has issued guidance indicating that operating as a Virtual Asset Service Provider (VASP) without a valid license may result in civil and criminal penalties, including financial sanctions against the entity, owners, and senior managers.

2. Personal Trading vs. Business Operations:

- Personal Trading:

If you're buying and selling USDT on Binance P2P as an individual for personal investment purposes, current regulations do not explicitly require a license. However, the frequency and volume of transactions can attract regulatory scrutiny, as you've experienced.

- Business Operations:

If your activities are deemed to be of a commercial nature—such as operating a trading business or offering financial services—a license is required. Engaging in unlicensed crypto-related business activities can lead to penalties.

3. Addressing the Court's Concerns:

- Transaction Volume:

High-frequency transactions, even on a personal account, can raise suspicions of unlicensed business activity. It's essential to clearly document and explain the nature of your transactions to the court.

- Licensing:

While personal trading may not require a license, if the court perceives your activities as commercial, the absence of a license could be problematic.

4. Recommendations:

- Seek Legal Counsel:

Given the legal complexities and potential implications, it's advisable to consult with a legal professional experienced in UAE financial regulations to represent you in court.

- Organize Documentation:

Prepare detailed records of your transactions, including dates, amounts, and purposes, to demonstrate the personal nature of your trading activities.

- Evaluate Your Activities:

Consider whether your trading patterns could be construed as commercial. If so, obtaining the appropriate license may be necessary to comply with UAE regulations.

Understanding the distinction between personal and commercial activities in crypto trading is crucial under UAE law. Proper legal guidance can help navigate your current situation and ensure compliance with regulatory requirements.

Please let me know if you need further assistance.