Dubai’s Virtual Assets Regulatory Authority (VARA) recently announced new regulatory guidelines on advertising, marketing and the promotion of virtual assets to advance responsible business growth across the digital asset industry.
According to a report by Khaleej Times, the guidelines were laid out with the objective of “providing a progressive framework that can enable borderless economic opportunity, without compromising market security, across the global Virtual Assets industry.” The guidelines specifically target market and advertising activities in the digital asset industry ahead of the Minimum Viable Licence (MVP) phase.
The MVP program allows VARA to test and select responsible digital asset service providers based on carefully set guidelines and risk mitigation levers for secure commercial operations. FTX Exchange (FZE), a subsidiary of FTX Europe, was the first major crypto firm to get an MVP licence to run its Virtual Asset (VA) Exchange services in Dubai.
With Bitcoin, Ethereum, NFTs and other virtual assets gaining fast traction in Dubai, regulators have increasingly become cautious about gaps that nefarious actors could exploit to communicate misleading information about virtual assets. The regulations thus seek to seal those loopholes by providing robust guidelines targeted at all forms of outreaches related to virtual assets.
“The VARA has identified an aspect of extreme importance and sensitivity for the virtual assets industry. Marketing and promotions are the first points of contact between end users and VASPs, and these determine whether the user will engage with the service or not.,” said Kokila Alagh, founder at KARM Legal Consultants, “These regulations will go a long way in ensuring that users have the needed information before making their decisions.”
According to the report, the VARA rules will apply to local content dissemination channels and outside entities targeting customers in the Dubai market.
In the recent past, irresponsible and predatory promotion of crypto projects has been on the rise, leading to the loss of billions from rug pulls and other types of scams. Luckily, regulators around the globe have started to take note. The UK has mainly been on the lookout, with the Advertising Standards Authority (ASA) issuing enforcement notices to over 50 crypto firms over the past year for advertising shady cryptocurrency services. Earlier this year, the Advertising Stands Council of India (ASCI) also released guidelines for policing crypto and digital asset-related advertisements.