Dubai’s VARA announces stricter rules for crypto marketing
Dubai was one of the first jurisdictions in the world to clarify regulatory requirements for Web3 companies in 2022, and regulators are now making changes to the rules regarding the marketing of digital assets. The Virtual Asset Regulatory Authority (VARA) has announced that marketing content related to digital assets must include a disclaimer informing people that using digital assets can be financially risky. The global crypto market, currently valued at $2.26 trillion, is notorious for its volatile nature, constantly facing the burden of microeconomic and macroeconomic factors.
According to VARA, all digital asset companies that release promotional material in Dubai after October 1 must add a disclaimer proverb“Virtual assets can lose all or part of their value and are subject to extreme volatility.”
Dubai authorities want to warn people about the risk of financial loss when trading crypto assets. Explaining the characteristics of virtual assets, VARA emphasized that they can be recorded on public blockchains and can be subject to fraud, manipulation and theft.
In its updated guidelines for all Virtual Asset Providers (VASPs), VARA clarified that any content with contradictory messages or “fine print” information will not be accepted by regulators. It also noted that digital asset marketing materials should not encourage individuals to interact with crypto assets or send crypto assets to random wallet addresses.
“The new marketing regulations apply to all marketing of or relating to virtual assets or VA activities in or directed to the UAE.
In March 2022, UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum officially launched VARA to oversee the growth, development and security of the Web3 sector. All Web3 players wishing to set up operations in Dubai will be required to identify themselves with VARA.
However, it is not the only regulatory body that has raised flags against improper promotion of crypto-related services. In 2022, Securities and Exchange Board of India (SEBI) reportedly caused celebrities to endorse crypto services and products. Later that year, the Advertising Standards Council of India (ASCI) asked advertisers of virtual digital assets (VDA) to post a disclaimer that read: “Crypto products and NFTs are unregulated and can be highly risky. There may be no legal remedy for any losses from such transactions.”
In May 2023, the UK government announced that it would ban cold calling for cryptocurrencies in a bid to combat fraudulent activity.
