Dubai’s Virtual Assets Regulatory Authority (VARA) plans to implement a requirement for the disclosure of ‘Crypto Whales’ associated with crypto issuers and service providers. These individuals, holding significant amounts of cryptocurrencies, are substantial influencers in the market due to their activities.

In an interview on February 24, Matthew White, VARA’s CEO, stated:

“If the majority of tokens are owned by its creator or an institution, their names should be disclosed. This will help investors know more about the products as most tokens are not owned by their creators but by third parties like venture capitalists.”

— Virtual Assets Regulatory Authority (VARA) (@varadubai) February 24, 2025

VARA’s Enhanced Investor Awareness and Protection
VARA’s strategy aims to protect investors by ensuring they receive comprehensive information regarding the virtual asset products available. Understanding the products better is crucial, as many tokens are held by venture capitalists rather than their creators.

White added that the new requirements will be part of the regulator’s plans for Q1, with several already in progress. By enforcing disclosures about major token holders, reserve compositions, and redemption procedures, VARA aims to provide investors with clearer insights regarding potential investment risks.

Challenges in Mandating Crypto Whale Disclosure
Despite these initiatives to aid the expanding investor community, challenges to implementation exist. Many crypto holders prefer anonymity, using pseudonyms linked to wallet addresses for transactions rather than their legal identities. White acknowledged that while VARA strives for transparency, it might not enforce disclosures of specific individual identities due to privacy concerns prevalent in digital asset dealings.

He emphasized that the framework should balance the necessity for investor information while considering privacy issues associated with cryptocurrency transactions. Furthermore, there are ongoing challenges with tracking down scammers and money launderers, with research indicating a rise in crypto scams.

VARA Readdressing Crypto Risks
In light of existing challenges, VARA remains proactive in its approaches to mitigate investment risks inherent in the crypto market. Recently, it issued a warning regarding the speculative nature of meme coins, noting their susceptibility to market manipulation and their lack of intrinsic value. The authority’s proposed enhancements align with Dubai’s vision of becoming a leading hub in finance and technology by 2030.