Dubai has become one of the first jurisdictions in the world to clarify regulatory requirements for Web3 companies in 2022, with regulators now making changes to their rules relating to the marketing of digital assets. The Virtual Assets Regulatory Authority (VARA) has announced that marketing content linked to digital assets should include a disclaimer informing people that using the digital asset could be financially risky. The global crypto market, currently valued at $2.26 trillion, is notorious for its volatile nature that constantly faces the brunt of microeconomic and macroeconomic factors.
According to VARA, all digital asset companies publishing promotional material in Dubai after October 1 must add a disclaimer that reads: “Virtual assets may lose their value in whole or in part and are subject to extreme volatility.”
Dubai authorities want to warn people about the risk of financial losses when trading crypto assets. Explaining the characteristics of virtual assets, VARA pointed out that they can be recorded on public blockchains and that they can be subject to fraud, manipulation and theft.
In updated guidelines for all Virtual Asset Service Providers (VASPs), VARA has clarified that regulatory authorities will not accept any content that contains contradictory messages or information in the ‘small print’. It also states that digital asset marketing material must not provoke individuals to engage with crypto assets or to transfer crypto assets to random wallet addresses.
“The new marketing regulations will apply to all marketing of virtual assets or VA activities in or in connection with them in or directed to the UAE.
In March 2022, UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum officially brought VARA into existence to oversee the growth, development and security of the Web3 sector. All Web3 players who wish to establish business in Dubai must identify themselves with VARA.
However, it is not the only regulatory body that has raised flags against the improper promotion of crypto-related services. In 2022, the 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 a disclaimer that read: “Crypto products and NFTs are unregulated and can be very risky. There may be no legal protection for any loss from such transactions.”
In May 2023, the UK government said it would ban cryptocurrency cold calling to crack down on fraudulent activity.
