Dubai’s Regulator VARA Adds Stiffer Requirements To Its Crypto Rules
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Dubai’s Virtual Asset Regulatory Authority (VARA) has announced plans to place tougher requirements on firms that operate in the cryptocurrency investment sector. According to the regulator, the promotional materials of these companies must henceforth include a disclaimer as a means of informing potential investors about the risks in the crypto sector.
VARA stated that the disclaimer must be visible and not ambiguous. They must also state that virtual assets are highly volatile and investors could lose part or all their funds from the investment. According to the watchdog, the move will ensure that potential investors are aware of the high risk of investments in crypto assets before they put their money.
VARA Has Charged Crypto Firms To Inform Investors About The Risks In The Industry
The Chief Executive Officer of VARA, Matthew White, commented on the recent development. He noted that the move will enable virtual asset service providers (VASPs) to carry out their operations responsibly while protecting investors.
It is their duty to inform investors about the high risk of investments in digital assets, so they understand the nature of the business they are investing in. White added that the measure will enhance transparency and trust within the crypto market.
Additionally, VARA stated that the firms that offer incentives on digital assets must receive compliance confirmation from the watchdog. The requirement is meant to provide the right information to prevent any obscurity of risks in potential investments.
White has also stated that the regulator plans to lessen the regulatory pressures on smaller crypto entities. The recently organized regulatory panel at the Paris Blockchain Week discussed the crypto regulations extensively.
The panel pointed out the issues with the present digital currency regulations and highlighted the need to improve the rules to reflect the market conditions. The aim is to help smaller firms survive and compete favorably in the market.
SCA and VARA to mutually Supervise VASPs To Ensure Compliance
The development is in line with the recent trend of giving VARA-licensed crypto providers to expand their product offerings and market beyond the UAE market. Earlier this month, the Securities and Commodities Authority (SCA) and VARA agreed that they would mutually supervise VASPs.
The agreement gives the service providers operating in Dubai to register with both SCA and VARA to enable them to serve a broader customer base across the region.
Chairman of VARA’s Executive Board, Helal Saeed Al Marri, stated that the initiative represents regulatory balance within the region. He added that it aligns with the vision of setting up an interoperable and secure virtual assets ecosystem.
