The rise of meme coins continues to captivate the market, with the market capitalization skyrocketing from $20 billion in January 2024 to $120 billion by the end of the same year. In light of this trend, Dubai’s Virtual Assets Regulatory Authority (VARA) has issued a cautionary alert to consumers and investors regarding the risks associated with advertisements promoting subscriptions to memecoins.
The alert issued by VARA highlights the fact that many meme coins lack intrinsic value and instead rely on social media trends, hype, or deceptive marketing tactics to determine their pricing.
Compliance with VARA regulations for Memecoins issued in Dubai
According to VARA, “Investors should exercise vigilance when confronted with promises of unrealistic returns, as these are often indicative of fraudulent schemes.” The regulatory body also cautions investors and consumers about the potential for substantial financial losses within short periods due to price crashes, lack of liquidity, or fraudulent activities.
VARA further stipulates that any virtual asset originating from Dubai, including promotional activities, advertisements, or solicitations, must adhere to the regulations and guidelines established by VARA.
Entities involved in unauthorized virtual asset operations are warned by VARA of potential enforcement actions.
“It is important for both consumers and investors to recognize that access to memecoin platforms may be restricted without prior notification. Therefore, it is crucial for individuals to take necessary steps to safeguard their financial well-being.”
The announcement from VARA follows closely on the heels of the UAE Ministry of Energy (MOEI) partnering with Shiba Inu to explore Web3 solutions in various sectors such as energy, infrastructure, and more. The collaboration aims to leverage Shiba Inu’s diverse Web3 technologies to enhance public service efficiency, promote sustainable infrastructure, and develop citizen-centric governance models.