Binance News
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Dubai To Implement New Crypto Regulations For Greater Transparency
According to ShibDaily, Dubai’s Virtual Assets Regulatory Authority (VARA) has announced plans to introduce new regulations requiring crypto businesses to disclose the identities of major token holders, often referred to as crypto whales. Matthew White, CEO of VARA, discussed these upcoming regulations in an interview, highlighting their aim to enhance consumer protection as Dubai seeks to establish itself as a leading global hub for the burgeoning cryptocurrency sector.
The new regulations will mandate virtual asset service providers to submit detailed reports on ownership structures, with the goal of improving market transparency and reducing the risk of manipulation. White explained that if a token’s majority ownership is held by its creator or an institution, their identities should be disclosed. This measure is intended to provide investors with greater transparency, as most tokens are typically owned by third parties, such as venture capital firms, rather than their original creators.
Enforcing these disclosure requirements presents challenges due to the pseudonymous nature of cryptocurrency transactions. While the regulation aims to offer investors more transparency regarding token ownership, market risk, and potential price manipulation, White acknowledged the difficulties in ensuring compliance. However, he believes that disclosing the identities of crypto whales could be feasible, as virtual assets are recorded and stored on the blockchain, an immutable and decentralized ledger that maintains a transparent history of all transactions across a peer-to-peer network.
The regulatory body is also considering new requirements for virtual asset issuers and service providers to disclose the composition and auditing of their reserves. Additionally, they would be required to establish transparent redemption mechanisms, providing investors with a clear description of risks. VARA plans to implement these new regulations in the first quarter of the year, with several already in progress.
White attributes Dubai’s success in the virtual asset sector to its top-down policy approach, business-friendly environment, and reputation as a safe and family-oriented city. A 2024 report recognized Dubai as one of the leading destinations for cryptocurrency businesses, citing its crypto-friendly regulatory framework as a key factor in attracting industry players. The report emphasized that Dubai, along with other leading jurisdictions, offers clear legal frameworks and favorable tax policies, positioning them as key hubs for the expanding blockchain and cryptocurrency industries.
The new regulations will mandate virtual asset service providers to submit detailed reports on ownership structures, with the goal of improving market transparency and reducing the risk of manipulation. White explained that if a token’s majority ownership is held by its creator or an institution, their identities should be disclosed. This measure is intended to provide investors with greater transparency, as most tokens are typically owned by third parties, such as venture capital firms, rather than their original creators.
Enforcing these disclosure requirements presents challenges due to the pseudonymous nature of cryptocurrency transactions. While the regulation aims to offer investors more transparency regarding token ownership, market risk, and potential price manipulation, White acknowledged the difficulties in ensuring compliance. However, he believes that disclosing the identities of crypto whales could be feasible, as virtual assets are recorded and stored on the blockchain, an immutable and decentralized ledger that maintains a transparent history of all transactions across a peer-to-peer network.
The regulatory body is also considering new requirements for virtual asset issuers and service providers to disclose the composition and auditing of their reserves. Additionally, they would be required to establish transparent redemption mechanisms, providing investors with a clear description of risks. VARA plans to implement these new regulations in the first quarter of the year, with several already in progress.
White attributes Dubai’s success in the virtual asset sector to its top-down policy approach, business-friendly environment, and reputation as a safe and family-oriented city. A 2024 report recognized Dubai as one of the leading destinations for cryptocurrency businesses, citing its crypto-friendly regulatory framework as a key factor in attracting industry players. The report emphasized that Dubai, along with other leading jurisdictions, offers clear legal frameworks and favorable tax policies, positioning them as key hubs for the expanding blockchain and cryptocurrency industries.
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