Dubai has adopted more stringent regulations for cryptocurrency businesses to safeguard investors. Along with tightening marketing and promotion restrictions for the sector, they also plan on rolling out a license program specifically targeting crypto service providers.
Dubai’s Virtual Asset Regulatory Authority (VARA), a specialized crypto regulator, reportedly released new restrictions regarding marketing, advertising and promotion of virtual assets on August 25.
Gulf News reports that VARA covers various forms of outreach, communications and advertising activities such as information distribution, creating awareness for new products/services/ideas etc. along with customer interaction, investment solicitation solicitation solicitation solicitation etc. In their guidelines.
Dubai-based media websites, search engines, online and offline publishing channels must refrain from publishing material related to virtual assets.
All local virtual asset service providers (VASPs), including advertising platforms, are allegedly required to ensure factual accuracy and reveal any promotional purposes in order to prevent deceiving potential clients.
VARA states that these new requirements relate to Dubai’s crypto-focused Minimal Viable Product (MVP) licensing scheme, noting:
“No operating license will be issued until these regulations have been established, to ensure that mass media information distribution or consumer enticement serves community interests.”
Dubai has implemented new rules governing crypto marketing and communication to ensure providers abide by certain guidelines when advertising to potential investors. This measure serves to protect them, since not everyone understands crypto schemes; at present there is only a regulation related to crypto marketing rules in Dubai.
Sam Bankman-FTX Fried’s crypto exchange was one of the first to obtain VARA’s MVP licence in July 2022 through its local subsidiary FZE, allowing FZE to operate VASP services in its region.
Abu Dhabi Blockchain and Virtual Assets Committee held its inaugural meeting on August 25 to review VARA’s recommendations, released upon Abu Dhabi announcing its intention to develop a blockchain and virtual asset strategy in line with its overall economic plan.
VARA was formed as Dubai’s Special Development and Free Zone Virtual Reality Services Provider in March 2022. VARA currently regulates and licenses only one VASP within their special development and free zone jurisdiction – the Dubai International Financial Centre – while in May, VARA acquired The Sandbox virtual reality environment as part of their industry regulatory ambitions.