UAE emirate to launch free zone for digital and virtual asset firms
UAE emirate Ras Al Khaimah has announced plans to launch a dedicated free trade zone for digital and virtual asset companies.

Ras Al Khaimah, one of the United Arab Emirate’s (UAE) seven Emirates, is set to launch a free zone for digital and virtual asset companies as the country’s approach to the industry continues to attract global crypto players.

The RAK Digital Assets Oasis (RAK DAO) will be a “purpose-built, innovation-enabling free zone for non-regulated activities in the virtual assets sector.” Applications will open in the second quarter of 2023, the statement said.

The free zone will be dedicated to digital and virtual assets service providers in emerging technologies, such as the metaverse, blockchain, utility tokens, virtual asset wallets, nonfungible tokens (NFTs), decentralized autonomous organizations (DAOs), decentralized applications (DApps) and other Web3-related businesses.

“We are building the free zone of the future for companies of the future,” said Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, chairman of the RAK International Corporate Centre, the operator of the new free zone. “As the world’s first free zone solely dedicated to digital and virtual asset companies, we look forward to supporting the ambitions of entrepreneurs from around the world.”

Free zones or free-trade zones are areas where entrepreneurs have 100% ownership of their businesses and have their own tax schemes and regulatory frameworks, except for the UAE’s criminal law.

Drawing up the new free zone’s steps, Dubai-based crypto lawyer Irina Heaver thinks “RAK DAO will start with non-financial activities first, then may introduce the financial activities at a later stage.” She added:

“[Entrepreneurs] won’t be able to launch a crypto exchange just yet, which is an ESCA-regulated financial activity.”

The Securities and Commodities Authority (SCA) is one of the UAE’s main financial regulators. According to the country’s latest federal-level virtual assets law, the SCA has authority throughout the Emirates, except for the financial free zones — the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) and others, which have their own financial regulators.

The new free zone adds to the more than 40 multidisciplinary free zones in the country that have attracted numerous crypto, blockchain and Web3 firms, including the Dubai Multi Commodities Centre (DMCC), DIFC and the ADGM.

The UAE has painted itself as a forward-thinking hub for crypto firms eyeing jurisdictions with friendlier regulations. In March 2022, Dubai unveiled its virtual assets law, along with the Virtual Asset Regulatory Authority, to protect investors and provide standards for the digital asset industry.

In September 2022, the Financial Services Regulatory Authority — the regulator of the ADGM — published guiding principles on its approach to regulating and overseeing the new asset class and its service providers.


Binance CEO responds to Forbes claims: ‘They don’t know how an exchange works’
The Binance CEO expressed his disappointment in the article and responded by saying the authors “seem to not understand the basics of how an exchange works.”

In the aftermath of the FTX collapse, Forbes published an article focused on the recent “shuffling” of funds by the cryptocurrency exchange Binance.

However, the following day on Feb. 28, Binance co-founder and CEO Changpeng “CZ” Zhao took to Twitter to respond. In response to the article, the CEO said:

“They seem to not understand the basics of how an exchange works. Our users are free to withdraw their assets any time they want.”

In his series of tweets, he addressed various claims from the Forbes article. This included a “backroom maneuver” when Binance transferred $1.8 billion in stablecoin collateral to hedge funds such as Tron, Amber Group and Alameda Research between August and December 2022.

They called out Tron, Amber group, Alameda Research, etc. They seem to not understand the basics of how an exchange works. Our users are free to withdraw their assets any time they want. Their withdrawals are turned into “received hundreds of millions of shifted collateral.” 2/ February 28, 2023

In light of the movement of funds, the article drew parallels between Binance and the now-defunct FTX in the lead-up to its demise. It also touched on the recent failed Voyager bid by Binance.US and the United States Securities and Exchange Commission’s planned legal action against Paxos Trust Company — the issuer of the Binance-branded stablecoin, Binance USD.

On Feb. 10, 2022, Forbes announced that Binance would take a $200 million stake in the company as a strategic investment.

However, in June 2022, in a follow-up report from Bloomberg, CZ said the company’s investment agreement is “changing” after Forbes’ deal to go public fell through. In light of the article, there has been no update on the situation.

However, in response to CZ, one Twitter user suggested he buy Forbes and “delete it,” to which CZ said, “not worth it.”

The article from Forbes comes after the New York Department of Financial Services (NYDFS) ordered the blockchain company Paxos Trust Company to terminate its issuance of BUSD.

On Feb. 13, it officially announced it would no longer mint the stablecoins while giving them a redemption period until February 2024. Binance says it still supports BUSD and is now looking into non-USD stablecoins.


Blockchain Founders Fund raises $75M to encourage Web3 mass adoption
Blockchain Founders Fund shared that the venture capital fund will potentially be spread across more than 200 companies within the next 12 months.

Blockchain Founders Fund, a venture capital fund supporting the adoption of Web3 and blockchain technology, has announced the close of a $75 million fundraising round from companies such as Polygon, Ripple, Octava, NEO Global Capital, Appworks, GSR, LD Capital, Metavest Capital and others, such as Sebastien Borget, chief operating officer of The Sandbox.

According to the announcement, the fund will focus on supporting high-potential early-stage pre-seed and seed projects that encourage the mass adoption of Web3 and blockchain technology. The fund has already invested in over 100 startups, including Altered State Machine, Splinterlands, GRID, Krayon and Magna.

In an interview with Cointelegraph, Aly Madhavji, managing partner of Blockchain Founders Fund, shared that the venture capital fund will potentially be spread across more than 200 companies within the next 12 months.

Speaking on the requirements and ways Web3 startups can seek funding from the Blockchain Founders Fund, Madhavji shared that it will focus on early-stage Web3 companies with strong teams and a demonstrated ability to execute their vision. In addition, the projects must offer products or services that solve real market needs and offer clear pathways for revenue generation or monetization over time. The projects must also have a clear, viable business plan that demonstrates a solid understanding of the target market and competitive landscape.

Discussing some of the major challenges in the crypto venture capitalist landscape and how the Blockchain Founders Fund is helping to address them, Madhavji shared: “There is a high level of competition for deals in the space, regulatory uncertainty, as well as a limited track record of successful projects. In order to address these challenges, we focus on making investments in high-quality startups that have strong fundamentals and demonstrate solid indications of traction."

Madhavji also told Cointelegraph that the Blockchain Founders Fund takes a team-centric approach when evaluating investments to ensure that only well-rounded teams are chosen for funding. He added:

"We take necessary precautions to navigate regulatory uncertainty by staying abreast with emerging trends in blockchain governance as they continue to evolve over time. Finally, we leverage our industry connections, including leading institutions and investors in the space to help our portfolio companies succeed.”

On Feb. 24, Cointelegraph covered a report describing a pullback in venture capital spending by investors in Q4 2022. But despite the pullback, investors are still looking to bankroll blockchain-based technologies, applications and startups.

The report also suggests that venture capital investments are shifting toward “non-volatile innovations,” including cross-chain bridges, payments and remittances, lending, decentralized autonomous organizations, asset management and digital identity management.


This Daily Dose was brought to you by Cointelegraph.

Share this post