Overview of Dubai’s New Marketing Regulations for Virtual Assets

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Dubai’s Virtual Assets Regulatory Authority (VARA) has introduced a fresh set of regulations (the “Marketing Regulations”) and accompanying guidance, focusing on the marketing of virtual assets (VAs) and related activities (VA Activities). These regulations will be effective from 1 October 2024, and they replace the existing rules, setting new standards for how virtual assets can be marketed in Dubai and the wider UAE.

Key Highlights of Dubai’s New Marketing Regulations for Virtual Assets

 

• Effective Date: October 1, 2024
• Applies To: Both domestic and foreign entities
• Covers: All marketing in or targeting Dubai
• Strict Requirements: Must be done by a licensed Virtual Asset Service Provider (VASP)

Entities with prior approval under the old rules may continue marketing under existing terms for up to 90 days after the new regulations take effect.

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1. General Prohibitions: Key Changes and Restrictions

The Marketing Regulations bring significant changes compared to the existing framework, especially in how marketing is conducted. Here’s a summary of the key updates:

Old Regulations	New Marketing Regulations
Non-licensed entities could market VAs if approved by VARA	Only VASPs licensed by VARA can market VAs or VA Activities in or targeting the UAE
Allowed for marketing Anonymity-Enhanced Cryptocurrencies (“Privacy Coins”)	Strict prohibition on marketing any VA involving Anonymity-Enhanced Cryptocurrencies

Anonymity-Enhanced Cryptocurrencies

These are virtual assets (commonly referred to as “privacy coins”) that obscure the tracing of transactions or ownership on public ledgers. Under the new rules, VASPs must ensure they have technology in place to trace ownership, or they cannot market these assets.

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2. Definition of Marketing

Under these new regulations, marketing is broadly defined and covers various forms of communication:

Marketing Forms	Examples
Traditional Media	TV ads, billboards, radio commercials
Digital Media	Social media posts, blogs, podcasts, live streams
VA-Specific Campaigns	Airdrops, banners on crypto websites

This broad definition is designed to ensure transparency and prevent circumvention of local regulations. Even educational content can be considered “marketing” if it is deemed to have a commercial purpose or intent behind it.

Example:

An influencer sharing details about a new cryptocurrency in a blog post would likely be considered marketing under these regulations, especially if the post contains affiliate links or invitations to invest.

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3. Territorial Scope: UAE-Wide Application

The regulations extend to any marketing in or targeting the UAE, not just Dubai. VARA’s rationale is that if a campaign is aimed at the UAE as a whole, it’s effectively targeting Dubai too, unless explicitly stated otherwise.

Factors Considered for Targeting UAE:

• Use of AED (Emirati Dirham) in marketing materials
• UAE-specific imagery or branding
• Featuring UAE celebrities or influencers
• Campaigns selecting the GCC (Gulf Cooperation Council) or UAE as a targeted location

In essence, even if your entity is not located in Dubai, you must comply with the Marketing Regulations if your campaign reaches UAE residents.

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4. Marketing Requirements: Ensuring Transparency and Fairness

Part C of the Marketing Regulations outlines critical requirements for firms involved in VA marketing. To be compliant, marketing efforts must be fair, clear, and not misleading. Here’s a breakdown of the core principles:

Principle	Explanation
Plain language	Avoid jargon or overly complex terms.
Clearly identifiable	Marketing materials must be immediately recognizable as advertisements.
Balanced picture	Present both risks and benefits equally.
Proportionality	Information should be proportionate to the complexity of the product.
Clarity on regulatory status	Clear disclosure if the VA or the provider is regulated.

Example of Non-Compliant Marketing:

A company runs an online ad encouraging people to “buy now before it’s too late,” implying urgency or guaranteed returns. This could mislead investors, and under VARA’s rules, it must clearly state the volatility and risk of total loss associated with the investment.

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5. Exemptions: Limited Scope

Some activities are exempt from the strict rules of the Marketing Regulations, provided specific criteria are met. These include:

Exemption	Criteria
Journalist exemption	Only applies to traditional journalists, not influencers or Key Opinion Leaders (KOLs).
Educational exemption	Applies to purely educational content that doesn’t encourage users to invest.
Private communications exemption	Limited to private messages to friends, family, or colleagues.

For instance, an educational blog explaining how blockchain technology works without promoting specific investments would likely fall under the educational exemption.

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6. Marketing Channels and Platforms

All platforms facilitating the marketing of VAs in the UAE must take reasonable steps to ensure compliance with these new rules. This includes:

• Social media platforms
• Search engines
• Digital and traditional broadcasters

These platforms must ensure the geo-blocking and location-based filtering mechanisms are in place to prevent non-compliant marketing from reaching UAE residents.

Example:

An app store must ensure that any cryptocurrency wallet app available for download in Dubai complies with VARA’s licensing requirements. If not, the app should be geo-blocked from appearing to UAE users.

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7. Enforcement and Penalties

VARA retains broad powers to investigate and penalize violations under Part IX of the Virtual Assets and Related Activities Regulations 2023. Non-compliance with the Marketing Regulations can result in significant penalties.

Violation	Maximum Fine
Failure to comply with marketing regulations	AED 10,000,000
Misleading or unclear advertising	Variable, depending on severity of the breach

Entities are also required to keep records of all marketing activities for eight years, ensuring transparency and accountability.

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8. Guidance and Case Studies

VARA has published a detailed Guidance to assist firms in understanding and complying with the regulations. It includes case studies that provide clarity on how the rules are applied in real-world scenarios.

Example Case Study:

A foreign crypto exchange is hosting an event in Dubai. Although they don’t sign up clients at the event, they prominently display their logo, fees, and commissions. Under the new rules, this would likely be considered marketing, and the exchange must ensure they comply with VARA’s regulations.

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What This Means for Firms

The new Marketing Regulations mark a significant step in Dubai’s ambition to become a global hub for virtual assets. By providing clearer guidelines on what constitutes compliant marketing, VARA seeks to create a transparent, investor-friendly environment. However, firms must remain vigilant, as penalties for non-compliance are hefty, and the scope of the regulations is broad.

For any entity involved in VA Activities, staying informed and compliant with these new rules is essential for continued operations in Dubai and the wider UAE.

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These changes not only bolster Dubai’s position as a forward-thinking jurisdiction for virtual assets but also reflect a growing global trend toward tightening regulatory frameworks around cryptocurrency marketing.