VARA Introduces New Marketing Regulations to Enhance Transparency and Consumer Protection in Dubai's Virtual Asset Sector

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 October 1st 2024.

Marketing Regulations for Virtual Assets and Related Activities 2024 are designed to enhance the integrity and transparency of marketing practices within the virtual assets sector in Dubai. The updated regulations emphasize 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.

Recognizing 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 emphasizes 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, color, or position that attracts the viewer’s attention. Disclaimers must be clear and understandable on all device types, including mobile and desktop.

Matthew White, CEO of VARA, emphasized the authority's commitment to creating a balanced regulatory environment that supports both innovation and consumer protection. "As the world’s first independent regulator for virtual assets, VARA is dedicated to building a regulatory landscape that not only safeguards consumers but also promotes the growth and innovation of the virtual assets sector," said White. "Our updated marketing regulations and the new guidance document demonstrate our dedication to maintaining Dubai’s leadership in digital finance. By offering clear, actionable guidance, we aim to help VASPs deliver services responsibly, while enhancing trust in the market."

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 organizers 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.

In a recent interview with Nicholas McNicholas, VARA’s Head of Regulatory Affairs and Enforcement, further insights into VARA’s regulatory approach were discussed, shedding light on how the authority aims to balance innovation with robust consumer protection in the virtual asset sector.

These new regulations and exemptions reinforce VARA's ongoing efforts to ensure that Dubai remains a leader in virtual asset innovation while prioritizing consumer safety and transparency.