VARA Marketing Guidelines: Dubai’s New Regulations for Promoting Digital Assets

blog-thumbnail_image-VARA Released Crypto Marketing Guidlines

The Virtual Assets Regulatory Association (VARA) has recently introduced stringent Virtual Assets Marketing Guidelines for companies promoting digital assets. These guidelines emphasize transparency, ethical marketing practices, and full disclosure of risks associated with crypto trading. They are part of Dubai’s ongoing effort to protect consumers from the volatility and risks of the fast-evolving crypto market.

What Are the New VARA Crypto Marketing Guidelines?

The Dubai Virtual Assets Regulatory Authority (VARA) rolled out its latest Marketing Regulations for Virtual Assets and Related Activities 2024 on September 26, 2024. These new rules, effective October 1, 2024, mandate that all crypto companies, whether based in Dubai or offshore, include explicit disclaimers and adhere to ethical marketing practices.

Key elements of these guidelines include:

  1. Mandatory Risk Disclosure: Starting in October, all promotional materials for cryptocurrencies must include the following disclaimer:
    “Virtual assets may lose their value in full or in part and are subject to extreme volatility.”
    This disclaimer aims to protect consumers from making uninformed decisions, highlighting the risks involved in digital asset investments.
  2. Accurate Information: Companies are required to provide accurate and transparent information in all promotional materials. Misleading or false claims are strictly prohibited, and violations could result in significant penalties.
  3. Ethical Marketing Standards: Firms must adhere to ethical marketing practices, using appropriate language that does not exploit consumers’ lack of knowledge or experience in crypto trading. This is to ensure traders have a clear understanding of the potential risks.

Protecting Consumers Through Transparency

VARA’s new guidelines focus on fostering transparency and integrity in the marketing of digital assets. Dubai’s move to strengthen these regulations highlights the city’s commitment to consumer protection, especially in light of the increasing popularity of cryptocurrencies and the potential for misinformation in the industry.

Matthew White, CEO of VARA, stated, “Our updated marketing regulations and newly issued guidance document reflect our commitment to maintaining Dubai’s position as a global leader in digital finance.” He emphasized that these regulations are designed to help Virtual Asset Service Providers (VASPs) in Dubai operate responsibly while building trust with consumers.

Dubai’s Crypto Regulation Journey

Dubai’s first step towards regulating the crypto industry began in 2023 when VARA established a comprehensive framework. It introduced crypto licensing governing various services, including:

  • Advisory services
  • Broker-dealer services
  • Custody services
  • Exchange services
  • Lending and borrowing services
  • Management and investment services
  • Transfer and settlement services

With this foundation in place, VARA has now extended its oversight to marketing activities, ensuring that all facets of the digital asset ecosystem are regulated.

The Global Trend of Tightening Crypto Marketing Rules

The UAE is not alone in tightening crypto marketing regulations. Countries like Belgium and Singapore have introduced similar rules to safeguard consumers from misleading promotions. In the United Kingdom, the Financial Conduct Authority (FCA) also implemented marketing rules for crypto firms, including a ban on ‘refer a friend’ promotions to prevent companies from luring customers through incentives without disclosing the risks involved.

These efforts are part of a global trend to create more responsible marketing practices in crypto, ensuring consumers are better informed and protected from potential losses.

Staying Compliant with VARA Marketing Guidelines

As the cryptocurrency industry continues to grow, so does the need for regulations that protect consumers. Dubai’s new VARA Marketing Guidelines set a clear standard for transparency and ethical behaviour in promoting digital assets. Companies must ensure their marketing strategies align with these guidelines or face potential penalties.

By adhering to these rules, crypto firms in Dubai can continue to thrive while maintaining consumers’ trust and solidifying the city’s position as a global leader in digital finance. For more information on how NH Management can support virtual assets services, reach out to our consultants via in**@nh**********.com or +97142221327. We also offer a a free crypto licensing guide. To download your free copy, click here: “Virtual Assets Licensing guide”.

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