Dubai became one of the first jurisdictions in the world to clarify regulatory requirements for Web3 firms in 2022, and regulators are now making changes to its rules related to marketing of digital assets. The Virtual Asset Regulatory Authority (VARA) has announced that marketing content related to digital assets should carry a disclaimer notifying people that engaging with digital assets could be financially risky. The global crypto market, currently valued at $2.26 trillion, is infamous for its volatile nature that constantly faces the brunt of microeconomic and macroeconomic factors.
According to VARA, all digital assets firms releasing promotional material in Dubai after October 1 must add a disclaimer saying, “Virtual assets may lose their value in full or in part and are subject to extreme volatility.”
Dubai’s authorities are looking to warn people about the risk of financial losses while trading crypto assets. Explaining the characteristics of virtual assets, VARA highlighted that they can be recorded on public blockchains and may be subject to fraud, manipulation, and theft.
In the updated guidance to all virtual asset service providers (VASPs), VARA has clarified that any content containing contradictory messages, or ‘small print’ information will not be accepted by regulators. It also noted that marketing material of digital assets must not provoke individuals to engage with crypto assets, or transmit crypto assets to random wallet addresses.
“The new Marketing Regulations will apply to all marketing of or relating to virtual assets or VA activities in or targeting the UAE.
In March 2022, UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum officially introduced VARA into existence to oversee the growth, development, and safety of the Web3 sector. All Web3 players looking to set up operations in Dubai are required to identify themselves with VARA.
However, it is not the only regulatory authority that has raised flags against improper promotion of crypto-related services. In 2022 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 the disclaimer which reads, “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
In May 2023, the UK government said it would ban cold calling for cryptocurrencies to clampdown on fraudulent activities.