VARA issues regulations governing virtual assets marketing

The world's only independent regulator for Virtual Assets (VA), Dubai’s Virtual Asset Regulatory Authority (VARA), has launched operations for its customised licensing regime this month.

With the commencement of its Minimum Viable Product (MVP) Phase, VARA on Thursday announced regulatory guidelines on marketing, advertising and promotions of VA across Dubai.

Guidance reflects VARA’s objective to provide a progressive framework that can enable borderless economic opportunity, without compromising market security, across the global Virtual Assets industry.

As part of its commitment to nurturing responsible industry participation, these regulations specifically address marketing and communications activities, ahead of operationalising the MVP licensees so that any mass-market information dissemination, and consumer solicitation are designed to safeguard community interests.

Regulations on marketing, advertising and promotions of VA cover all forms of outreach, communications and advertising, including publication of information, awareness building, customer engagement, and/or investor solicitation.

VARA rules extend to VA related communications by any entity leveraging Dubai-based media sites, search platforms, and online or off-line publishing channels that explicitly target customers within the Dubai market, establishing guardrails on permissible audience segments, in addition to content obligations.

Equally all content dissemination channels operating from Dubai are obligated to act responsibly, and ensure compliance with prevailing Guidance as it pertains to VA communications facilitated via their platforms

Guidelines further detail the obligations of Dubai licensed VASPs and any advertising platforms that are positioning VA content across traditional and new-age media channels for the Dubai market, to ensure factual accuracy, explicitly demonstrate any promotional intent, and in no way mislead on the guaranteed nature of their returns.

The principles are supplemented by rigid enforcement standards and penalties for non-compliance that collectively provide market confidence ahead of MVP operations, as it augments marketing, data protection and consumer protection laws that have been well embedded across the UAE.

This marks a next step in global VA ecosystem innovation, targeting safe market adoption, and encouraging credible industry participation to drive sustainability of Virtual Assets as an anchor in the future economy.

"The VARA has identified an aspect of extreme importance and sensitivity for the virtual assets industry. Marketing and promotions are the first point of contact between end users and VASPs, and these determine whether the user will engage with the service or not. It is imperative for users to have accurate and full details to make an informed decision as to their VA exposure. These regulations will go a long way in ensuring that users have the needed information before making their decisions," said Kokila Alagh, founder at KARM Legal Consultants.