UAE Government wants to foster innovation and market growth, but also cautious about the potential misuse of crypto for sanctions evasion, fraud, terror financing, and money laundering. Facilitative crypto regulation should have appropriate space for innovation and healthy competition while clamping down on illicit conduct.

The future of money is cryptocurrency

Bill Gates

Leading regional and international coordination to eliminate regulatory arbitrage and making cross border compliance easier, is another aspect that can distinguish the UAE as a reputable player in the global crypto industry.

 

The crucial policy and strategic question for the UAE is how to maintain the fine balance between inviting innovation, technology and wealth generation and owning the future of crypto and blockchain, being the ‘Wall Street of Crypto’, as recently termed by Bloomberg, versus having robust regulations in place to control the possible risks associated to a financial crime that such new, technology boundaries may unwittingly bring.

 

The UAE has been protecting an encouraging environment for the growth of its crypto industry, especially with Dubai’s enactment of the Virtual Assets Law and establishment of VARA, and while the industry was largely unregulated a few years ago, recent legislative measures have shown the government’s enthusiasm to reduce the potential financial crime risk in the emerging industry.

 

With the rise of demand for Digital & virtual assets, Mahmood Bin Jaber Advocates & Legal Consultants has updated with the developments, rules & regulations in the field of law. We are here to serve the best possible assistance regarding disputes arising from digital assets.

We represent our clients in all types of civil law cases that include, but are not limited to:

  • Corporate debt Recovery
  • Corporate receivable collection services
  • Debt collection services for financial products ( ex: Loans, Credit cards, etc..)

Frequently asked questions about Capital Market / Crypto / Digital & virtual assets

Dubai has issued a new law called the Law No. 4 of 2022 (Dubai Virtual Assets Law), aiming to regulate the global virtual asset industry in the Emirate of Dubai. The law assesses the need for business growth the virtual assets, with the need for their regulation. While this law applies to free zones and special development zones, it does not apply to the Dubai International Financial Centre. This law came into effect on 11th March 2022.

As per the current scenario Cybercriminals who run cryptocurrency scams in the UAE could face detention of up to five years and or a fine of between Dh250,000 and Dh1 million. Under Article 48 of the Online Security Law, any person who promotes, advertises or, encourages dealing in cryptocurrency, that is not officially recognized in the UAE, or does so without being licensed, is subject to a penalty of detention and, or a fine between Dh20,000 and Dh500,000,”

Each Central banks worldwide are hesitant to approve cryptocurrencies because of a lack of underlying value and regulatory oversight. Even the Central Bank of the UAE does not recognize cryptocurrencies as legal tender. However, they can be traded on numerous crypto exchange platforms available as there is no prohibition against crypto assets in the UAE and new improvements do not make a difference on accepted and banned cryptocurrencies but rather the focus is on activities that may, or may not, be conducted within the regulations.

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