Dubai, in a move to crack down on the marketing of virtual assets, will force all VASPs to include a clear risk disclaimer on promotional material as of October 1, 2024, under new regulations announced by the Virtual Assets Regulatory Authority, or VARA.
With an increasing number of crypto investors and businesses moving into the city, marketing practices here have to be transparent and responsible.
Crypto Marketing Under New Rules
The updated rules mandate that marketers explicitly state that “virtual assets may lose their value in full or in part, and are subject to extreme volatility.” This has been assumed to curb the myriad of false disclosures presented by traders that could eventually lead to uninformed investment decisions.
Therefore, VARA has introduced the latest “Marketing Guidance Document,” which defines how VASPs ought to communicate their services without any contradiction with regulatory standards.
The document is comprehensive regarding how VASPs should present their services within the constraint of a regulatory framework, ensuring the correctness and honest intentions that are attached with marketing efforts.
According to the chief executive of VARA, Matthew White, these changes aim to create an environment by forming regulations that are pro-innovation yet protect consumer interests.
He added that the guidelines apply to all licensees operating in and out of VARA and those marketing virtual assets. The newest set of guidelines shows the stance of the authority in ensuring standards in an ever-changing crypto map.
Aerial view of Dubai, UAE. Image: Emirates
Dubai: Rising Interest In Crypto Investments
As interest in cryptocurrencies continues to grow globally, Dubai has paved its way into being a promising haven for crypto investments. The city is deemed crypto-friendly, with non-onerous regulations and tax breaks, attracting investors both local and international.
According to recent reports, by the end of 2024, traders of cryptocurrency in the Middle East can hit 500,000. This rising demand for sophisticated investment products calls for clearer guidelines on marketing.
Thus, during such a time, new regulations are surfacing in this side of Dubai while significant updates in the legal landscape regarding cryptocurrencies are happening.
There is now a court ruling which acknowledges cryptocurrency to be valid as a form of payment within employment contracts, and in this regard, further legitimized digital assets in the region.
More so, projects such as RAK Digital Assets Oasis are designed to create an economic free zone particularly for blockchain and cryptocurrency activities. These trends show that Dubai is apparently ready to function as a global leader in digital finance.
Featured image from Shutterstock, chart from TradingView