PC: TradeDog
Strengthened Regulatory Framework to Ensure Transparency and Consumer Protection
In this regard, the Virtual Assets Regulatory Authority, VARA, announced a major update in the marketing regulations formulated by the emirate of Dubai to make an improvement in its regulatory framework for Virtual Asset Service Providers operating within the Emirate. New legislation in the form of Marketing Regulations for Virtual Assets and Related Activities 2024 will come into force from 1st October 2024. These regulations on marketing will enhance the integrity, accuracy, and transparency of marketing practices in Dubai’s rapidly expanding virtual asset sector.
VARA has also published a Marketing Guidance Document, a tool to provide simple, actionable directions for VASPs conducting marketing in the region. This will be further strides by VARA to promote consumer protection at the forefront of virtual asset market growth.
Accuracy and Consumer Protection is a Key Focus
The updated marketing regulations reflect VARA’s emphasis on creating a clear and responsible ecosystem for virtual asset marketing activities. In particular, the new rules focus more on ensuring that marketing communications from VASPs are reliable, transparent, and therefore untruthful. In enforcing these regulations, VARA will be able to protect consumer interests and thus build greater trust in the virtual asset space.
One of the most important natures of the new regulations will be how widely they will apply. The rules would affect all the entities marketing or engaging in related activities within Dubai with virtual assets, irrespective of whether those entities are licensed with VARA. This will make sure that the global virtual asset sector deploys a coherent standard of communication and thus creates a more secure and reliable marketplace.
Comprehensive Marketing Guidance Document
Along with the new rules, VARA comes up with the Marketing Guidance Document, which will be of utmost importance to the VASPs. This document will elucidate in considerable detail how marketing is to be conducted within the framework of VARA’s new rules; it will provide VASPs with a clear roadmap through which they can gain clarity and confidence to navigate the Dubai regulatory environment.
The guidance document covers some significant areas including:
- Language Use: Using proper and responsible language in marketing material, clear and not misleading to consumers or users in communications.
- Disclosure Requirements: Specific disclosure on what must be made public to the consumers or users to give them accurate understanding of the risks and opportunities related to virtual assets.
- Ethical Marketing Practices: Focus on ethics, such as ensuring that advertising materials are developed to safeguard consumers against misleading claims or exaggerated promises.
These core principles VARA work to ensure that VASPs can conduct marketing in a responsible manner reflective of the principles of transparency and integrity that should be expeditiously materialised in Dubai’s virtual asset market.
VARA’s Support for Innovation
VARA chief executive Matthew White expressed the authority’s commitment to offering the best for consumers as well as innovation in the virtual assets sphere.
White said that, “VARA aims to give rise to a regulatory landscape that, on the one hand, protects the rights of consumers and, on the other, promotes the development and innovation of the virtual assets space. Being the world’s first independent regulator for virtual assets, VARA is committed to that goal.” He also revealed that the updated regulations as well as the newly issued guidance document are part of their continued efforts to ensure that the emirate remains a leader in digital finance globally.
“We are confident that by providing clear, actionable guidance we can help VASPs to operate responsibly while helping grow trust and transparency within the market,” said White.
The Marketing Regulations for Virtual Assets and Related Activities 2024 becomes effective on 1 October 2024, while the Marketing Guidance Document is live as of today. The move further repositions VARA as a global leader in the virtual asset regulatory space. These updates will therefore enable VASPs based in Dubai to responsibly market VASPs that protect consumer rights, promoting transparency, an event that will support continued growth in the virtual asset sector across the region.
