Dubai Wants Crypto Companies to Warn Customers of Risks

Dubai’s cryptocurrency regulator reportedly wants companies to warn customers of the risks of digital currencies.

The Virtual Assets Regulatory Authority (VARA) updated its guidelines and will require companies that want to market crypto in the United Arab Emirates to include a new and “prominent” disclaimer starting Oct. 1, Bloomberg reported Thursday (Sept. 26).

Crypto companies must inform consumers that “virtual assets may lose their value in full or in part, and are subject to extreme volatility,” according to the report.

“We believe that by providing clear and actionable guidance, we can help VASPs deliver their services responsibly, while fostering greater trust and transparency in the market,” VARA CEO Matthew White said, referring to virtual asset service providers, per the report.

The UAE is following in the footsteps of other countries that have introduced measures to regulate crypto advertising, the report said. After putting new guidelines in place in 2022, the United Kingdom’s Financial Conduct Authority in 2023 banned “refer a friend” bonuses.

In Belgium, Bloomberg reported, companies that want to advertise cryptocurrency must also include this disclaimer: “The only guarantee in crypto is risk.”

Companies that want to offer incentives for virtual assets or related products in the UAE will need to get a compliance confirmation from VARA, per the report. Bonuses must not be used to “divert or mislead” investors from determining the investment risk.

Meanwhile, crypto payments are gaining ground in the digital commerce space. For example, fiat-cryptocurrency payment gateway Alchemy Pay said Sept. 18 that its Virtual Card now supports Google Pay, allowing users to pair the card with that digital payment platform to make everyday payments.

News of the partnership came the same day that Visa said it was teaming with Singapore-based digital payments solutions provider dtcpay to help consumers and businesses convert digital currencies into fiat and make digital payments.

Tech-driven consumers — the 15% of consumers who are usually the first to buy the latest connected device — are often habitual cryptocurrency users, according to the PYMNTS Intelligence report “Shopping With Cryptocurrency: Tech-Driven Consumers Drive Market Acceptance.” The study showed that 24% of these consumers use cryptocurrency at least 10 to 20 times per month.