Dubai Crypto Regulator VARA Issues Public Alert Cautioning Investors Against Meme Coin Advertisements Due to Their High-Risk Nature

Dubai's crypto regulator the Virtual Assets Regulatory Authority has issued a warning about meme coin promotions as meme coins show no signs of losing popularity.

Dubai's crypto regulator has warned investors against meme coin advertisements due to their high-risk nature, as meme coins continue to gain popularity.

The Virtual Assets Regulatory Authority (VARA) of Dubai issued a public alert on Feb. 13 cautioning investors about the risks associated with these tokens, such as price manipulation, liquidity problems, and potential fraud, among others.

“Meme coins are highly speculative and volatile assets that are often subject to market manipulation. Many of these assets have no intrinsic value and their prices are largely influenced by social media trends, hype, or aggressive promotional strategies,” VARA stated.

The regulator noted that promises of high profits quickly are usually a red flag for scams. Meme coin trading can be risky as their prices can crash fast and liquidity may dry up quickly, VARA warned.

“There is a risk of significant financial loss within short time frames due to price collapses, liquidity shortages, or scams,” the regulator added.

The United Arab Emirates first announced plans to issue cryptocurrency licenses in Feb. 2022. A year later, Dubai introduced crypto regulations that require業者 to obtain approval and relevant licenses to operate in the emirate, with specific rules applying to activities such as issuing tokens, providing consulting services, offering custody, and operating exchange services.

At press time, the meme coin market cap stands at $81.1 billion, according to data from CoinGecko.