Dubai gold trader obtains first Middle East cryptocurrency licence

Free zone operator Dubai Multi Commodities Centre (DMCC) has announced that gold trader Regal RA DMCC is the first company in the Middle East to obtain a licence to trade cryptocurrencies.

The company will offer the storage of bitcoin, ethereum and other currencies in a vault at DMCC’s Almas Tower headquarters in Jumeirah Lake Towers, DMCC said in a statement carried by Bloomberg.

“At the heart of DMCC’s long term strategic growth plan is the use of technology and innovation to disrupt and connect new markets, industries and customers,” DMCC executive chairman Ahmed Bin Sulayem was quoted as saying.

“The announcement today embodies this approach.”

Regal, which has been trading gold in Dubai since 2016 said investors in cryptocurrencies were reluctant to store large amounts of coins in online wallets and exchanges due to the risk of hacking, identity theft and malware.

“We have developed what we believe is the number one most secure way of investing in bitcoin, ethereum and other crypto-commodities,” said Tyler Gallagher, the CEO of the company’s Texas-headquartered parent Regal Assets.

The manager of the company’s Dubai office, Ksenia Kiseleva, told Bloomberg it was also working on an online trading platform for crypto-commodities

“We look at them as a commodity not as a method of payment,” she was quoted as saying. “There is growing demand in the UAE and worldwide.”

The announcement comes just over a week after the UAE’s Securities and Commodities Authority (SCA) warned investors about digital token-based fundraising activities.

Read: UAE regulator warns cryptocurrency investors, issuers

The SCA said in a circular that initial coin offerings (ICOs), initial token offerings, token presales or token crowdsales were “highly speculative and highly volatile regarding prices”, according to state news agency WAM.

The organisation’s warnings on February 4 came after the price of the world’s most popular digital currency bitcoin fell from a record high of $19,511 on December 18 to a low of below $8,000.

Bitcoin now stands at $8,610.43, according to Coindesk.

On Monday, Saudi Arabia’s Capital Market Authority warned that “investment, speculation and participation in the initial offerings of digital currencies carries high risks”, according to Saudi Press Agency.

It warned it could not protect investors from factors including capital loss, fraud and volatility as cryptocurrencies are outside of its regulation.

“The warning comes after considering the spread of invitations and promotions to invest in digital currencies and the emergence of websites and social media that promote these currencies and target Saudi citizens and residents, as well as increased volatility in the recent period,” according to the report.