Dubai’s Virtual Assets Regulatory Authority (VARA) recently issued a consumer alert addressing the risks associated with advertisements promoting subscriptions to memecoins.

This alert follows the recent partnership between the UAE Ministry of Energy (MOEI) and Shiba Inu to explore Web3 solutions in energy, infrastructure, and governance.

VARA Warns on Memecoin Risks

The market capitalization of meme coins has surged from $20 billion in January 2024 to $120 billion by the end of the year, prompting a warning from VARA about the associated risks.

VARA noted that many meme coins do not have intrinsic value. Instead, their pricing is often driven by "social media trends, public hype, or deceptive promotional tactics".

The regulator cautioned investors to be wary of claims promising unrealistic returns, as these are frequently indicative of fraudulent schemes. VARA also pointed out the high risk of substantial financial losses within short timeframes, due to factors such as sudden price collapses, liquidity issues, or scams.

"Both consumers and investors should be aware that access to memecoin platforms may be restricted without prior notice. Thus, everyone must take necessary measures to safeguard personal financial security," VARA warned.

SHIBUSD Trades Within Equidistant Channel

Meanwhile, the SHIBUSD H1 chart shows the price has been trading within an equidistant channel. Recently, the price bounced at the channel’s support, but no bullish momentum has formed yet. Buyers may wait for a breakout above the last swing high at 0.00001680 to enter long.

SHIBUSD, H1 Chart, Source: TradingView
SHIBUSD, H1 Chart, Source: TradingView

Alternatively, if the price bounces off the channel’s support again and forms a bullish reversal pattern, it could trigger bullish momentum. On the other hand, a bearish breakout at the support could push the coin lower.

MOEI Partners with Shiba Inu for Web3

In its alert, VARA made it clear that any virtual asset issued from Dubai, including related promotions, advertisements, or solicitations, must adhere to the regulatory framework set by the authority. It also warned entities involved in unauthorized virtual asset activities that they may face enforcement actions.

This announcement by VARA follows the recent news that the UAE Ministry of Energy (MOEI) entered a partnership with Shiba Inu to develop Web3 solutions in sectors including energy, infrastructure, and governance. The collaboration aims to utilize Shiba Inu’s range of Web3 technologies to enhance public service efficiency, support green infrastructure, and develop citizen-focused governance models.

Source: Finance Magnates