Key Takeaways:
Dubai’s VARA plans to mandate that crypto service providers disclose the identities of crypto whales.
The regulation seeks to improve transparency in the digital asset market and offer investors clearer insights into token ownership and associated risks.
These new rules are set to take effect in Q1 2025, with several policies already in progress.
In an interview with The Standard on Monday, Matthew White, CEO of Dubai’s Virtual Assets Regulatory Authority (VARA), revealed that the regulator is planning new rules requiring crypto businesses to disclose the identities of major token holders, commonly known as crypto whales.
These regulations will apply to virtual asset service providers operating in Dubai, mandating detailed reporting of ownership structures to enhance market transparency and reduce the risk of manipulation.
White emphasized that implementing these rules is a priority, particularly in cases where a single entity or creator controls the majority of a token’s supply.
However, enforcing such disclosures presents challenges due to the pseudonymous nature of cryptocurrency transactions.
Challenges in Identifying Crypto Whales Amid Pseudonymous Transactions
Requiring crypto businesses to disclose whale identities is expected to give investors greater clarity on token ownership, market risks, and potential price manipulation. However, White acknowledged the practical difficulties of enforcing this rule.
Most cryptocurrency holders operate under pseudonyms, with transactions recorded under wallet addresses rather than real names.
This anonymity complicates efforts to trace individuals behind large holdings, making it challenging to combat financial crimes such as fraud and money laundering.
Despite these hurdles, White remains confident that transparency can still be improved.
He pointed out that blockchain technology provides an immutable ledger that allows regulators to track substantial asset movements.
While real identities may not always be revealed, monitoring whale transactions can help detect market manipulation and ensure a more stable digital asset ecosystem.
Expanding Crypto Regulations for Greater Market Stability
Beyond crypto whale disclosures, VARA is working on additional regulations requiring asset issuers and crypto service providers to provide more details about their financial reserves.
These measures will mandate businesses to disclose reserve compositions, undergo independent audits, and establish clear redemption mechanisms.
The goal is to boost investor confidence and prevent sudden market crashes triggered by undisclosed financial weaknesses.
White confirmed that implementing these regulations remains a top priority for VARA in the first quarter, with several already in progress.
A recent Chainalysis report highlighted that in 2024 alone, crypto scams accounted for at least $9.9 billion in on-chain transactions.
The figure is expected to rise as more illicit addresses linked to fraudulent activities are uncovered.
Dubai’s Crypto Sector Expansion Gains Momentum
Dubai continues its push to establish itself as a global financial and technology hub by 2030, with VARA playing a central role in shaping the crypto industry.
According to the latest report, VARA has issued 24 licenses to crypto businesses, granted 10 in-principle approvals, and is reviewing more than 350 applications.
The emirate has expanded its licensing efforts, attracting top crypto firms to the region.
On February 12, Canadian-based crypto infrastructure firm Aquanow received a Virtual Asset Service Provider (VASP) license, allowing it to offer investment, lending, borrowing, and broker-dealer services in the region.
Similarly, decentralized finance platform MANTRA Finance has secured its VASP license, enabling it to operate as a regulated virtual asset exchange, providing broker-dealer and investment management services to global investors.
Additionally, HashKey MENA, a crypto exchange, has been granted final regulatory approval to offer broker-dealer services, further strengthening Dubai’s presence in the industry.
AI Integration to Strengthen Oversight
VARA is also exploring the integration of generative AI to enhance monitoring of virtual asset transactions and detect suspicious activities.
While specific implementation details remain undisclosed, White emphasized that AI could strengthen compliance monitoring and regulatory oversight.
He credited Dubai’s rapid progress to its top-down policy approach, business-friendly environment, and reputation as a safe, family-friendly destination.
The Price and Promise of Regulatory Certainty
As Dubai unveils its plans for whale disclosure and reserve transparency, it offers the crypto industry something often in short supply: regulatory certainty.
The 350+ applications for VARA licensing suggest that clear rules, even stringent ones, attract rather than repel serious market participants.
This counterintuitive reality—that reasonable regulation can stimulate growth—challenges the either/or thinking that has dominated crypto discourse.
For businesses and users alike, Dubai’s approach provides a preview of how crypto markets might function when freed from constant regulatory speculation.
As this experiment unfolds, the true value proposition may not be freedom from rules, but freedom from the uncertainty about what those rules will be.
Dubai’s wager is that this certainty will prove worth the price of transparency.
Frequently Asked Questions (FAQs)
Under VARA’s regulations, a crypto whale is an individual, institution, or entity that holds a substantial share of a cryptocurrency and potentially influences market prices with large trades. The regulations seek to monitor these major holders to prevent market manipulation and abrupt price fluctuations.
Individual investors will gain greater transparency on token ownership, helping them assess risks associated with whale-driven price swings. By understanding who controls large token shares, investors can make informed decisions and mitigate sudden market volatility risks.
VARA will enforce compliance through mandatory reporting, routine audits, and monitoring to ensure crypto service providers disclose whale identities accurately. Non-compliant firms risk penalties, operational restrictions, or license revocation for failing to meet regulatory standards.
The post Dubai Plans Move to Reveal Identity of Crypto Whales: Report appeared first on Cryptonews.
