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VARA strengthens marketing rules for virtual assets in Dubai

Friday 27 September 2024 10:07 CET | News

The Virtual Assets Regulatory Authority (VARA) has updated its marketing regulations for VASPs in Dubai to enhance transparency and consumer protection.

 

The Virtual Assets Regulatory Authority (VARA) has introduced key updates to its marketing regulations, aimed at enhancing the regulatory framework for Virtual Asset Service Providers (VASPs) operating in Dubai. Alongside these updates, VARA has introduced a comprehensive Marketing Guidance Document to provide clear and actionable insights for VASPs engaging in marketing activities within the region. The new regulations will come into effect on 1 October 2024.

VARA launches new updates to marketing regulation for VASPs

Enhancing transparency and integrity

Marketing Regulations for Virtual Assets and Related Activities 2024 aim to enhance the integrity and transparency of marketing practices within the virtual assets sector in Dubai. The updated regulations emphasise accuracy, transparency, and consumer protection. They apply to all entities involved in marketing virtual assets or related activities, regardless of their licensing status with VARA.

Recognising the need for clear and consistent guidelines, VARA has also issued a new Marketing Guidance Document that will serve as a vital resource for VASPs. This document provides detailed instructions and best practices on how to conduct compliant marketing activities in Dubai, ensuring that VASPs can navigate the regulatory landscape with confidence. The guidance covers a range of topics, including the appropriate use of language in marketing materials, disclosure requirements, and the ethical considerations that should underpin all marketing efforts.

Key regulatory updates

Broad definition of marketing activities

The term ‘marketing’ has been broadly defined to cover all forms of advertisement, inducement, solicitation, or promotion related to virtual assets. VARA will consider multiple factors such as content, target audience, and commercial purpose to assess whether an activity qualifies as marketing.

Campaigns targeting the UAE

VARA has outlined a non-exhaustive list of factors that determine whether a campaign is ‘targeting the UAE.’ These factors include the use of AED as the currency, UAE-specific press releases, Emirati Arabic dialect, and campaigns featuring UAE imagery or celebrities.

Fair, clear, and not misleading marketing

Marketing materials must be fair, clear, and not misleading, allowing industry participants and investors to make informed decisions. VARA emphasises the use of plain language, clear legibility, and proportionality in presenting information.

Identification of promotional content

Marketing should be clearly identifiable as promotional in nature. Terms like ‘ad,’ ‘advertisement,’ or ‘sponsored content’ should be prominently displayed, particularly in social media posts or content created as part of a remunerated arrangement.

Monetary and non-monetary incentives

Offers of monetary or non-monetary incentives in marketing materials must be presented responsibly, without creating urgency or misleading investors. VARA advises that incentives should not overshadow risk disclosures and must be clearly presented alongside any ongoing charges.

Prominent Disclaimers

Any required disclaimers in marketing must be prominently displayed. This means they must be easily seen, legible, and in a size, colour, or position that attracts the viewer’s attention. Disclaimers must be clear and understandable on all device types, including mobile and desktop.

Exemptions for marketing at events in Dubai

VARA has also introduced a limited exemption for entities that are not licensed by VARA, allowing them to engage in marketing of virtual assets at physical events held in the Emirate of Dubai. However, these entities must adhere to several strict guidelines, including ensuring no VA activities are conducted in the UAE, refraining from onboarding UAE residents at the event, and including a prominent disclaimer that they are not licensed by VARA. Additionally, marketing at these events is restricted to the entity’s name, logo, service explanations, and educational purposes only.

Event organisers are also required to ensure that all attendees are qualified and maintain a list of their details. They must confirm that exhibitors will not carry out VA Activities without proper VARA licensing and may face suspension or cancellation of the event if non-compliance is found.


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Keywords: regulation, virtual asset, compliance, fraud prevention, cryptocurrency
Categories: Fraud & Financial Crime
Companies: Virtual Assets Regulatory Authority
Countries: United Arab Emirates
This article is part of category

Fraud & Financial Crime

Virtual Assets Regulatory Authority

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