Kraken Gets VARA Licence for UAE Crypto Services

{getToc} $title={Table of Contents}

Kraken gains VARA broker-dealer licence in Dubai, adding regulated AED funding to spot, margin and OTC trading for UAE clients.

Payward FZCO, Kraken's UAE subsidiary, has received preliminary broker-dealer and investment management approval from VARA in Dubai.
UAE clients will gain access to spot, margin and OTC trading, staking, peer-to-peer transfers, and institutional services via Kraken Prime.
The regulated structure allows AED funding and withdrawal through a locally supervised entity connected to Kraken's global order books.
Preliminary approval is a conditional step - Kraken may not begin serving clients until VARA issues a full VASP licence.
Kraken plans to expand into derivatives, lending and new investment products for qualified clients, each subject to further VARA approval.
The approval places Kraken alongside Binance, OKX and Crypto.com as major exchanges operating within Dubai's VARA framework.

Payward FZCO Enters Dubai's Regulated VASP Landscape

Payward FZCO, Kraken's Dubai-registered subsidiary, has received preliminary approval for a VASP broker-dealer and investment management licence from the Virtual Assets Regulatory Authority. The authorisation places Kraken inside Dubai's regulated crypto perimeter, joining major exchanges including Binance, OKX, and Crypto.com that have each already secured VARA licences.

Central to the approval is an AED fiat on-ramp, enabling UAE clients to fund and withdraw in UAE dirhams through the locally supervised Payward FZCO entity. This connects local investors to Kraken's global order books within a regulated onshore structure. The approval reflects the continuing momentum of Dubai crypto regulation, with VARA steadily attracting major international exchanges through its defined virtual asset framework.

What the Licence Permits

Payward FZCO's preliminary authorisation covers broker-dealer and investment management services for both retail and professional investors in Dubai. Under this arrangement, UAE-based clients will be able to access spot trading, margin trading, over-the-counter (OTC) trading, staking, and peer-to-peer crypto transfers through Kraken's Krak product. Institutional clients will additionally have access to Kraken Prime, the exchange's dedicated platform for professional counterparties.

Through the locally regulated Payward subsidiary, customers will be able to fund accounts and withdraw in UAE dirhams (AED). This provides an onshore fiat connection to Kraken's global liquidity pool, which spans markets in Europe, the United States, and Asia-Pacific. Retail clients will, however, be subject to VARA's retail-access rules, which limit the range of products and services available to non-professional investors.

Dubai's VARA Framework and the Licensing Landscape

VARA established itself as Dubai's dedicated virtual asset regulator in 2022, developing one of the most comprehensive crypto licensing frameworks among global financial centres. The authority has since licensed major international exchanges including Binance, OKX, and Crypto.com, while demonstrating active enforcement - ordering KuCoin to cease services to Dubai residents in March 2026 for operating without proper authorisation.

In early 2026, VARA surpassed 85 licences issued and brought a unified VASP register online, marking a significant maturation of Dubai's regulated crypto market. Kraken's approval adds another major exchange to that register, further consolidating the emirate's position as the region's primary hub for supervised virtual asset activity.

Under VARA's two-stage process, applicants with preliminary approval may not begin serving clients until a full VASP licence is issued. Payward FZCO will be subject to VARA's updated Rulebooks, revised in May 2025 to introduce tighter requirements around margin trading and primary token distribution. The firm will also need to maintain segregated client assets and meet prescribed capital adequacy thresholds as a condition of full licensing.

AED Access and What Comes Next

The inclusion of AED funding and withdrawal is a commercially significant feature of the approval. Rather than routing client funds through offshore or third-party arrangements, Payward FZCO will handle dirham transactions through its locally supervised entity, keeping money movement within a regulated onshore structure. This kind of fiat connectivity has increasingly become a prerequisite for exchanges seeking mainstream adoption among UAE residents.

Arjun Sethi, Co-CEO of Payward and Kraken, pointed to Dubai's early-mover regulatory advantage as the commercial rationale. "Dubai wrote a rulebook for crypto before most jurisdictions even acknowledged the asset class," he said in a company statement. "That clarity is why real liquidity and institutional capital now sit in the UAE." He added that operating under VARA means serving clients through a locally supervised entity rather than from offshore.

Beyond the initial product offering, the exchange plans to expand into derivatives, lending, and new investment products for qualified clients, each requiring further VARA approval before launch. The announcement comes as Kraken's parent Payward pursues a US initial public offering (IPO), having filed in November 2025 and raised US$800 million at a US$20 billion valuation ahead of that listing.

Practical Considerations for UAE Crypto Advisors and Wealth Managers

For advisors discussing crypto exchange options with clients, the immediate consideration is timing. Preliminary VARA approval does not permit Kraken to onboard clients or begin operations - a full VASP licence from VARA is required before any services go live. Advisors should treat Kraken as an incoming option rather than a currently available platform until VARA confirms the full licence.

Once fully licensed, Kraken's AED on-ramp and access to deep global liquidity will make it a notable addition to the regulated exchange landscape in Dubai. For clients seeking broader regulatory context, the UAE's crypto framework spans three separate regulators - VARA, the Central Bank of the UAE (CBUAE), and the Dubai Financial Services Authority (DFSA). Advisors can find a detailed breakdown of how these bodies govern different virtual asset categories through UAE Advisor Guide's overview of UAE crypto licensing.

What Clients are Asking their Advisors

What does VARA preliminary approval mean for Kraken's UAE launch?

Preliminary approval is the first stage of VARA's two-step licensing process. It is a conditional authorisation, and Kraken may not begin serving UAE clients or conducting virtual asset activities until VARA grants a full VASP licence. There is no fixed public timeline for how quickly the full licence follows from preliminary approval.

What services will Kraken offer once it is fully licensed in Dubai?

Under its broker-dealer and investment management licence, Kraken plans to offer spot trading, margin trading, OTC trading, staking, and peer-to-peer transfers via its Krak product. Institutional clients will have access to Kraken Prime. Further products - including derivatives and lending - are planned for qualified clients but each require additional VARA approval before launch.

How does Kraken's VARA approval compare with other exchanges in Dubai?

Kraken joins Binance, OKX, and Crypto.com, which already hold VARA licences in Dubai. The broker-dealer and investment management category is among VARA's most comprehensive licence types, covering trading, OTC services, and staking. As with other licensed firms, Payward FZCO will be required to maintain segregated client assets and meet prescribed capital requirements.

What does the AED funding feature mean in practice for UAE investors?

AED funding and withdrawal means UAE clients will be able to move UAE dirhams directly in and out of their Kraken accounts through the locally regulated Payward FZCO entity. This removes the need to route funds through overseas arrangements and provides a regulated onshore fiat connection to Kraken's global liquidity pool.