The Virtual Assets Regulatory Authority has issued an urgent warning to investors regarding the dangers of meme coin advertisements, highlighting their high-risk nature.
Dubai’s Virtual Assets Regulatory Authority (VARA) has raised alarms about the ongoing popularity of meme coins in a public alert issued on February 13. The regulator, responsible for overseeing the virtual asset sector in Dubai, emphasized the significant risks associated with these tokens, including potential for price manipulation, liquidity challenges, and fraudulent schemes.
“Meme coins are exceedingly speculative and volatile assets, often susceptible to market manipulation. Many lack intrinsic value, with their pricing driven by social media trends, hype, or deceptive promotional tactics.”
VARA
VARA cautioned that claims of substantial profits often signal a scam. The authority noted that trading in meme coins can lead to severe financial losses, as prices can plummet rapidly and liquidity can evaporate. “Investors face the risk of significant financial loss in a very short period due to price collapses, liquidity shortages, or scams,” the regulator stated.
The UAE first indicated its intention to issue cryptocurrency licenses in February 2022, and by early 2023, Dubai implemented regulations that require crypto companies to obtain necessary approvals and licenses to operate within the city. Specific regulations govern activities such as token issuance, consulting services, storage solutions, and exchange operations. As of the latest data, the meme coin market capitalization stands at $81.1 billion.
