Dubai’s Virtual Assets Regulatory Authority has implemented a crackdown on firms and crypto companies operating without licenses or breaching marketing regulations.
On October 9, Dubai’s Virtual Assets Regulatory Authority (VARA) imposed cease-and-desist orders and fines on seven businesses for operating without the necessary licenses and violating marketing regulations.
VARA stated that it is conducting additional investigations with other local authorities. The regulator did not specify which companies were subject to the sanctions.
VARA Warns Against Unlicensed Crypto Companies
The crypto regulator also cautioned the public to “avoid engaging with unlicensed firms” in the announcement. According to VARA, users and institutions are subject to reputational and financial hazards when they engage with unregulated entities.
The regulator also stated the potential legal repercussions of engaging with these service providers. In and from Dubai, virtual asset services are exclusively available from licensed firms, as VARA emphasized:
“VARA will not tolerate any attempts to operate without appropriate licenses, nor will we allow unauthorized marketing of virtual asset activities. Our marketing regulations further emphasize Dubai’s commitment to ensuring transparency and always protecting stakeholder interests.”
Furthermore, VARA directed the seven entities to cease all marketing and advertising promotions or crypto-related activities that pertain to digital assets.
VARA also disclosed that it had imposed penalties ranging from 50,000 ($13,600) to 100,000 ($27,200) UAE dirhams on each entity.
The Regulatory Affairs and Enforcement division of VARA stated that their primary objective is to guarantee the security of the crypto ecosystem in Dubai for investors and consumers while simultaneously promoting compliance among organizations.
Dubai implements stricter regulations regarding crypto marketing
The recent enforcement is a result of the regulator’s recent endeavors to tighten its regulations on crypto marketing.
The crypto regulator announced on September 26 that companies that promote virtual asset investments should include a conspicuous disclaimer in their promotional materials.
VARA stated that crypto promotions should disclose that virtual assets are susceptible to volatility and may experience a decline in value.
Matthew White, CEO of VARA, stated that these regulations would guarantee that virtual asset providers responsibly provide services, thereby promoting transparency and trust in the market.
