Payward, the parent company of cryptocurrency exchange Kraken, has received preliminary regulatory approval from Dubai's Virtual Assets Regulatory Authority (VARA). The green light lets Kraken offer UAE dirham funding, margin trading, and over-the-counter services to clients in the region. Institutional investors will also gain access to Kraken Prime under the new framework.
What the approval unlocks
The VARA nod is a first step—not a full license. But it already clears the way for specific products. UAE dirham funding means users can deposit and withdraw in the local currency directly on Kraken's platform. Margin trading, which lets traders borrow funds to amplify positions, becomes available alongside OTC services for large block trades outside public order books.
For institutions, the approval opens Kraken Prime, the exchange's suite for high-volume traders. That includes dedicated support, faster execution, and deeper liquidity. Payward had to meet VARA's compliance standards before offering these services. The regulator didn't specify how long the preliminary stage lasts or what final approval requires.
Dubai's growing crypto framework
VARA was established in 2022 to oversee virtual asset activities in Dubai, excluding the Dubai International Financial Centre. The regulator has issued a handful of approvals to exchanges and custodians, but it's still building out its rulebook. Kraken's preliminary approval signals that the exchange passed initial checks on anti-money laundering, cybersecurity, and customer protection.
This isn't Kraken's first move in the Middle East. The company already holds a license in Abu Dhabi Global Market. But Dubai's VARA regime is separate, and the dirham funding feature is new for Kraken in the region. The exchange didn't disclose how many UAE clients it expects to serve.
Kraken's regulatory push
The VARA approval adds to Kraken's growing list of licenses worldwide. The exchange has registrations in the U.S., Canada, the U.K., and parts of Europe. Payward has been expanding its institutional business—Kraken Prime launched in 2021 and now operates in several jurisdictions.
Dubai's approval comes as regulators globally tighten rules on crypto. VARA's framework requires licensed firms to keep customer assets segregated and submit regular audits. Kraken will have to comply with those conditions from day one. The company said it's working toward final authorization but didn't give a timeline.
The preliminary approval doesn't cover retail services beyond dirham funding and margin trading. Kraken still needs additional VARA signoffs to offer spot trading or custody to UAE retail clients. For now, the exchange is focusing on the services it can launch immediately.
