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Dubai Regulators Introduce New Crypto Guidelines
Dubai’s regulator of virtual assets, the Virtual Asset Regulatory Authority (VARA), has recently set out new rules on marketing and advertising virtual assets. The local regulators published a press release on Gulf News on Thursday, introducing new regulatory guidelines targeting crypto marketing activities. Dubai Looks to Increase Regulations Under the new regulations, all local virtual […]
The post Dubai Regulators Introduce New Crypto Guidelines appeared first on Blockonomi.
Dubai’s VARA Issues New Guidelines Over Crypto Promotions
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Amid Dubai moving forward with a new license program for cryptocurrency service providers, local regulators are introducing additional marketing and advertising rules for the industry.
Dubai’s Virtual Asset Regulatory Authority (VARA), the city’s dedicated crypto regulator, reportedly announced new regulatory guidelines on marketing, advertising and promotions of virtual assets on Aug. 25.
In the rules, the VARA referred to all forms of outreach, communications and advertising, dissemination of information, building awareness, customer engagement, investor solicitation and others, the local news agency Gulf News reported.
The guidelines cover all virtual asset-related communications and entities publishing information on Dubai-based media websites, search platforms as well as online and offline publishing channels that target customers within the Dubai market.
The rules reportedly also require all local virtual asset service providers (VASP), including advertising platforms, to ensure factual accuracy and openly demonstrate any promotional intent to avoid misleading potential customers.
The VARA reportedly noted that the new guidelines relate to Dubai’s crypto-focused Minimal Viable Product (MVP) license, stating:
“These regulations specifically address marketing and communications activities, ahead of operationalizing the MVP licensees so that any mass-market information dissemination, and consumer solicitation are designed to safeguard community interests.”
As previously reported, Sam Bankman-Fried’s FTX crypto exchange was one of the first companies to receive VARA’s MVP license through its local subsidiary FZE in July 2022. The license enabled FZE to operate a VASP in the region fully.
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VARA’s guidelines came along with Abu Dhabi’s new plans to launch a strategy for blockchain and virtual assets that aligns with the country’s overall economic strategy. On Aug. 25, the Abu Dhabi Blockchain and Virtual Assets Committee held its first meeting to discuss the strategy.
Established in March 2022, Dubai’s VARA is responsible for licensing and regulating all VASPs in the Emirate’s special development and free zones with the exception of the Dubai International Financial Centre. The regulator is known for its ambitious industry regulation plans, purchasing land in the virtual reality world The Sandbox in May.
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According to Dubai officials, the subsidiary’s operations will serve as a regulatory trial for future commercial services using virtual assets.
On Friday, FZE, a subsidiary of crypto exchange FTX, was awarded Dubai’s first Minimal Viable Product (MVP) license, allowing full operation of the exchange in the region.
Dubai’s Virtual Asset Regulatory Authority (VARA) issued the operating license to FZE under the MVP program, which according to Helal Saeed Almarri, the director general of Dubai WTC Authority, is designed for secure and sustainable growth in Dubai. For now, the FTX FZE exchange’s operations are in the test phase and will be focused on providing various crypto services.
According to FTX CEO Sam Bankman-Fried, the newly licensed exchange will operate under a model incorporating regulatory oversight and Financial Action Task Force (FATF) compliance controls catering to Tier 1 international financial markets. In addition, Almarri revealed that the exchange’s operations will be used as a regulatory trial for future commercial services using virtual assets.
“The MVP Phase, exclusive to select, responsible international players like FTX, will allow VARA to prudently structure guidelines and risk mitigation levers for secure commercial operations,” said Almarri highlighting the region’s willingness for extensive crypto adoption.
With the license, FTX FZE has been approved to deploy regulated crypto derivatives products and trading services to qualified institutional investors. In addition, the exchange can also act as a clearing house, operate a nonfungible token (NFT) marketplace, and provide custodial services across the region.
Back in March 2022, FTX was the first to receive Dubai’s virtual asset exchange (VAX) license soon after the regulators signed off the virtual assets law and established the Dubai VARA. Crypto exchange OKX also received a provisional license from Dubai’s regulatory authorities to provide additional services to local investors and financial services providers.
Dubai, and the rest of the UAE, have been taking steps towards cryptocurrency adoption at a fast pace this year. The emirates went a step further on its bet for innovation earlier this year with the launch of Dubai Metaverse Strategy.
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The interest of financial authorities on cryptocurrencies and the approbation of major exchanges is setting the tone for regulators across the world. While certain countries are focused on tightening controls, the experimental approach of Dubai and the green light recently given to the European Union Markets in Crypto Assets proposal could serve as a reference for other regions.