Interest in memecoins significantly rose in 2024, prompting Dubai's Virtual Assets Regulatory Authority (VARA) to issue a warning regarding associated risks.
Attention to Memecoins
The memecoin market saw a rise in capitalization from $20 billion to $120 billion over the year. However, VARA notes that many memecoins lack intrinsic value and rely mostly on social media trends and advertising.
VARA Regulations and Precautions
VARA emphasizes that memecoins issued from Dubai must comply with established regulations. Investors are also advised to exercise caution when faced with promises of unrealistic returns, as this can indicate fraud. There is a risk of significant financial loss due to price collapses, liquidity shortages, or scams.
Collaboration with Shiba Inu
VARA's recent announcement came after the UAE Ministry of Energy's partnership with Shiba Inu to develop Web3 solutions in energy and infrastructure, leveraging Shiba Inu's broad range of technologies for public service efficiency and environmental considerations.
VARA continues to monitor memecoin market developments, urging investors to remain vigilant and refrain from falling for misleading promises.
