United Arab Emirates’s Virtual Assets Regulatory Authority new rule will require crypto firms to add a disclaimer, warning potential customers about the risks that come with investing in digital assets.
According to a Bloomberg report, companies that want to market their digital assets in the UAE must include a disclaimer to their produce that states “virtual assets may lose their value in full or in part, and are subject to extreme volatility,” starting Oct. 1.
In the updated marketing guidelines for virtual assets, companies that provide incentives for virtual assets or related products in the UAE must acquire a compliance confirmation from VARA.
For example, they must be able to prove that the bonus will not be used to “divert or mislead” investors from properly assessing the risks related to the investment product.
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VARA Chief Executive Officer Matthew White hopes that “providing clear and actionable guidance” can guarantee virtual asset service providers will be able to build trust and transparency while operating in the UAE.
In recent years, Dubai has become one of the most favorable cities for crypto marketers, thanks to its crypto-friendly tax regulations and large venture capital investment prospects.
A report published by Bitget research revealed that in 2024, an average of 500,000 crypto traders are reside in the Middle East. The number is expected to skyrocket towards 700,000 by the end of the year.
Last month, a landmark Dubai court ruling recognized cryptocurrency as a valid form of payment under employment contracts.
In October 2023, United Arab Emirates launched RAK Digital Assets Oasis, the region’s first economic free zone that accommodates cryptocurrency, web3, blockchain, and artificial intelligence. The zone offers a business-friendly regulatory environment with tax benefits.
As of March 2024, more than 100 entities had received licenses to operate in the RAK DAO, including Indian crypto exchange CoinDCX.
Read more: CoinDCX’s Okto becomes first Web3 wallet licensed in UAE’s RAK DAO