A recent advisory has been issued by Dubai’s Virtual Assets Regulatory Authority, highlighting the potential dangers linked to advertisements for subscriptions to memecoins. This alert comes shortly after a partnership was announced between the Ministry of Energy of the UAE and Shiba Inu, aimed at investigating Web3 solutions in various domains such as energy, infrastructure, and governance.
The quickly rising market capitalization of meme coins, which reportedly increased from $20 billion in January to $120 billion later on, has prompted this cautionary message. The authority emphasized that the majority of memecoins lack intrinsic value; their worth tends to fluctuate according to social media influence, public excitement, or misleading marketing practices.
In light of this, the regulator has strongly advised investors to be vigilant against proposals that promise unrealistic returns, as such claims are often linked to fraudulent schemes. There’s a significant risk of rapid financial losses, particularly due to unexpected drops in price, liquidity constraints, or potential scams. VARA also warned that access to memecoin platforms may be restricted unexpectedly, urging individuals to take steps to protect their financial wellbeing.
On a related note, an analysis of the SHIBUSD trading pattern indicates that it has been fluctuating within an equidistant channel. Recently, the price rebounded from the channel’s support; however, a lack of bullish momentum has been observed. Buyers are reportedly waiting for a breakout above the previous swing high at 0.00001680 to initiate long positions. Conversely, should the price again bounce off the channel’s support while forming a bullish reversal pattern, it might lead to upward momentum. Nonetheless, a bearish breakout from the support could result in a downward trend for the coin.
Importantly, the advisory from VARA made it clear that any virtual assets emanating from Dubai, along with related promotional content or solicitations, must comply with the established regulatory standards. Entities participating in unauthorized virtual asset practices face potential enforcement measures.
The collaboration between the UAE Ministry of Energy and Shiba Inu is noteworthy, as it seeks to harness the array of Web3 technologies offered by Shiba Inu to improve the efficiency of public services, aid in the development of sustainable infrastructure, and create governance models centered around citizen engagement.