Dubai’s Virtual Assets Regulatory Authority (VARA) is set to introduce new rules requiring licensed crypto businesses to disclose the identities of large crypto holders, also known as whales. The initiative is aimed at increasing transparency and protecting investors in Dubai’s rapidly expanding virtual asset market.
VARA’s Plan to Identify Major Crypto Holders
According to VARA CEO Matthew White, the regulator plans to mandate licensed crypto issuers and service providers to reveal major token holders, particularly in cases where most of a token’s supply is controlled by a single creator or institution.
“This move could help investors better understand the products they are buying,” White told The Standard, noting that many tokens are largely controlled by venture capitalists or institutional investors.
While specific names may not always be required, VARA’s focus is on ensuring wallet addresses linked to major holdings are disclosed, given that blockchain transactions are publicly verifiable and permanent.
Enhanced Risk Disclosure for Investors
Beyond identifying large holders, VARA is also working on regulations to ensure clearer risk disclosures for investors. The new requirements, which are expected to roll out within Q1 2025, are already in progress and aim to help consumers make informed decisions.
White emphasized that investors should be aware of the risks associated with token ownership concentration, as such holdings can impact liquidity, price stability, and potential market manipulation.
VARA’s Recent Crackdown on Meme Coin Promotions
The new rules come shortly after VARA issued a public warning about meme coin promotions, cautioning investors about the risks of price manipulation, liquidity concerns, and fraudulent schemes. The regulator stressed that meme coins often lack intrinsic value and are frequently driven by social media hype and misleading marketing tactics.
What This Means for Dubai’s Crypto Market
Dubai has positioned itself as a global hub for cryptocurrency and Web3 innovation, but VARA’s new measures signal a shift toward stricter oversight. By requiring greater transparency from major token holders, the regulator aims to reduce risks for retail investors and enhance market credibility.
While the full verification process remains undisclosed, VARA’s efforts to increase transparency could reshape how crypto businesses operate in Dubai, potentially setting a precedent for other jurisdictions looking to regulate major token holders.
