Dubai Introduces New Rules for Crypto Businesses to Disclose Large Holders

Dubai’s Virtual Assets Regulatory Authority (VARA) is planning to introduce new rules requiring crypto businesses to disclose the names of large holders, also known as “whales.” This move aims to protect consumers in the city’s growing virtual asset market.

Protecting Consumers and Increasing Transparency

Crypto investors holding large sums in Dubai could soon have their identities revealed to authorities. The new rules will require licensed crypto issuers and service providers to disclose the names of major crypto holders, especially if most tokens are owned by a creator or institution. According to VARA’s boss, Matthew White, this move could help investors better understand the products they are buying.

White explained that many tokens are controlled by third parties like venture capitalists, and disclosing this information could provide investors with a clearer understanding of the risks involved. He also noted that VARA won’t necessarily demand that specific people are named, as many cryptocurrency holders use pseudonyms and transactions are tied to wallet addresses, not real names.

Benefits of Blockchain Technology

White believes that it’s possible to disclose big holders because blockchain is clear and permanent. This technology allows for transparent and tamper-proof transactions, making it easier to track and verify ownership. The regulator is also thinking about making sure investors get a “clear description of risks” associated with the products they are buying.

New Rules and Verification Process

The new requirements are part of VARA’s plans for Q1, with most already in progress. While the verification process wasn’t fully disclosed, the regulator is working to ensure that investors are protected and informed. Some key points to note about the new rules include:

  • Disclosure of large holders: Crypto businesses will be required to disclose the names of major crypto holders.
  • Clear description of risks: Investors will receive a clear description of the risks associated with the products they are buying.
  • Transparency: The use of blockchain technology will provide transparent and tamper-proof transactions.

Previous Warnings and Regulatory Efforts

The new rules follow a public warning from VARA about meme coin promotions. The regulator had cautioned investors about risks tied to these tokens, including:

  • Price manipulation
  • Liquidity problems
  • Potential fraud
  • Lack of intrinsic value
  • Misleading promotional tactics

VARA’s efforts to regulate the crypto market and protect consumers are ongoing. For more news and updates on the crypto industry, visit Global Crypto News.

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