Dubai's VARA Announces Stricter Regulations for Crypto Marketing

Dubai's regulator is looking to warn investors about the risk of financial losses while dealing with crypto assets.

Written by Radhika Parashar, Edited by David Delima | Updated: 26 September 2024 19:23 IST

Dubai's VARA Announces Stricter Regulations for Crypto Marketing

Photo Credit: Pixabay/ Danor Aharon

VARA has said no crypto ads should provoke individuals to engage with crypto assets

Highlights

Dubai established VARA as the digital assets regulator in 2022
It aims to warn customers of the risks of engaging with crypto
VARA is concerned that volatile crypto assets can cause financial losses

Dubai became one of the first jurisdictions in the world to clarify regulatory requirements for Web3 firms in 2022, and regulators are now making changes to its rules related to marketing of digital assets. The Virtual Asset Regulatory Authority (VARA) has announced that marketing content related to digital assets should carry a disclaimer notifying people that engaging with digital assets could be financially risky. The global crypto market, currently valued at $2.26 trillion, is infamous for its volatile nature that constantly faces the brunt of microeconomic and macroeconomic factors.

According to VARA, all digital assets firms releasing promotional material in Dubai after October 1 must add a disclaimer saying, “Virtual assets may lose their value in full or in part and are subject to extreme volatility.”

Dubai's authorities are looking to warn people about the risk of financial losses while trading crypto assets. Explaining the characteristics of virtual assets, VARA highlighted that they can be recorded on public blockchains and may be subject to fraud, manipulation, and theft.

WazirX’s Moratorium Appeal Gets Four Months' Time from Singapore Court

In the updated guidance to all virtual asset service providers (VASPs), VARA has clarified that any content containing contradictory messages, or ‘small print' information will not be accepted by regulators. It also noted that marketing material of digital assets must not provoke individuals to engage with crypto assets, or transmit crypto assets to random wallet addresses.

“The new Marketing Regulations will apply to all marketing of or relating to virtual assets or VA activities in or targeting the UAE.

In March 2022, UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum officially introduced VARA into existence to oversee the growth, development, and safety of the Web3 sector. All Web3 players looking to set up operations in Dubai are required to identify themselves with VARA.

Sweden Classifies Some Crypto Exchanges as ‘Professional Money Launderers’

However, it is not the only regulatory authority that has raised flags against improper promotion of crypto-related services. In 2022 Securities and Exchange Board of India (SEBI) reportedly raised concerns about celebrities endorsing crypto services and products. Later that year, the Advertising Standards Council of India (ASCI) asked virtual digital asset (VDA) advertisers to carry the disclaimer which reads, “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions."

In May 2023, the UK government said it would ban cold calling for cryptocurrencies to clampdown on fraudulent activities.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Cryptocurrency, Dubai, VARA, Crypto Ads

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More

Pixel Phones With Temperature Sensor Could Get Material Auto-Detection Feature Soon