Legal Insights
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ToggleVirtual Assets Regulatory Authority (VARA) has issued the Regulations on the Marketing of Virtual Assets and Related Activities 2024, which aim to ensure responsible marketing while nurturing innovation in Dubai’s digital economy.
To assist stakeholders in avoiding potential breaches and non-compliance with the new rules, VARA has issued Guidance on the Regulations on the Marketing of Virtual Assets and Related Activities 2024. This document provides a detailed explanation of key definitions accompanied by illustrative examples designed to highlight certain issues and considerations relevant to the Marketing Regulations.
Effective as of October 1st, 2024, the forthcoming regulations will supersede the existing guidelines pertaining to Marketing, Advertising, and Promotions in connection with Virtual Assets as stipulated in Administrative Order No. 01/2022, along with the provisions for Penalties for Non-Compliance as outlined in Administrative Order No. 02/2022.
Key Points of the New Marketing Rules:
1. Scope
The new regulations will apply to ALL Virtual Asset (VA) marketing targeting the UAE. This includes marketing on social media, at events, and in educational content. The regulations will apply to both domestic and foreign entities, regardless of whether they are authorized and licensed by VARA to carry out VA activities.
2. Licensed Entities Only
Marketing can only be conducted by, or on behalf of and approved by, Virtual Asset Service Providers (VASPs) licensed by VARA.
3. Prohibited Marketing
Anonymity-enhanced cryptocurrencies are strictly banned, and marketers must avoid creating urgency or misleading statements about the risks of VAs.
4. Events & Third-Party Marketing
Non-licensed entities may market at events, but strict disclaimers and controls apply. All third-party marketing must follow due diligence and record-keeping for up to 8 years.
5. Exemptions
Journalistic, educational, and personal or private communications are exempt from being considered marketing, provided the content is non-promotional and transparent and includes proper disclaimers about VA risks and volatility.
6. KOLs Activity
Key Opinion Leaders must fully comply with the Marketing Regulations and all relevant requirements applicable to marketing activities in the Emirate, including those related to engaging in media activities for commercial purposes.
7. Fines
Compared to the previous regulation, the fines that may be imposed on an entity or individual have seen a significant increase. For instance, previously, displaying inaccurate or misleading information in marketing materials could be subject to a fine of AED 200,000, whereas under the new rules fine can amount to as much as AED 10,000,000.
Given the aforementioned obligations, we highly recommend consulting legal experts before releasing any marketing materials related to Virtual Assets, to ensure compliance with existing regulations and protect your business from potential risks and penalties.
Contact us today for your free initial legal consultation.