KHALEEJ TIMES, Thursday, Dec 30, 2021 | Jumada Al-Uola 25, 1443
UAE travel: New PCR testing rule implemented at Dubai International Airport
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, top legal experts have said.
In November, the new legislations were introduced as part of the several legal
reforms introduced by the UAE President, His Highness Sheikh Khalifa bin Zayed
Penalties for promoting unrecognised cryptocurrencies
“Under Article 48 of the Online Security Law, any person who promotes,
advertises or encourages dealing in cryptocurrency, that is not officially
recognised 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,” explained
Josh Kemp, partner at ADG Legal.
Aside from any fraudulent scheme being an offence under the Penal Code, running
a crypto scam online would expose persons to prosecution under the new law.
This would take place most likely either under Article 40 for using online means
to fraudulently obtain a benefit, or otherwise under Article 41 by running an
online scheme by creating or managing a false portfolio or company to receive or
collect funds from the public for investment, management, utilisation or
“Article 40 carries a penalty of detention of not less than one year and/or a
fine of between Dh 250,000 to Dh 1 million, while Article 41 carries a penalty
of detention for up to five years and/or a fine of between Dh 250,000 and Dh 1
million,” said Kostubh Devnani, dispute resolution lawyer at ADG Legal.
Combating cryptocurrency scams in UAE
The legal team at ADG confirmed that the UAE had seen a rise in these scams,
similar to most countries.
“Perhaps the most publicised and recent example is the DubaiCoin scam which
claimed to launch as Dubai’s official cryptocurrency,” said Kemp.
“It was later discovered that fraudsters had set up the DubaiCoin website to
phish data and money from crypto investors. When potential investors filled out
a form on the website, an agent would contact them and offer to exchange their
currency for DubaiCoin,” he added.
In May 2021, the Dubai Government released an official statement dismissing all
claims about DubaiCoin being the official cryptocurrency of Dubai. However, it
is believed that many had fallen prey to the fraud because of the
cryptocurrency’s convincing name.
“The positive news is that apart from the new laws, and UAE stepping up efforts
to combat financial crime, courts in other (particularly common law)
jurisdictions have been willing to grant remedies normally applicable to
physical or tangible property to victims of crypto scams, such as freezing
orders and orders for production of information,” said Devnani.
The UAE courts will inevitably adapt in the same way, perhaps most imminently in
the DIFC and ADGM courts.
Vijay Valecha, Chief Investment Officer at Century Financial said that,
globally, over $7.7 billion was stolen in cryptocurrency scams worldwide in
2021, an 81 per cent rise compared to 2020. “There have been a few hundred cases
of crypto scams where people in Dubai have lost close to Dh 80 million in 2021,”
Are any cryptocurrencies banned in UAE?
Central banks worldwide are reluctant to endorse cryptocurrencies because of a
lack of underlying value and regulatory oversight.
“Even the Central Bank of the UAE does not recognize cryptocurrencies as a legal
tender. However, they can be traded on various crypto exchange platforms
available as there is no prohibition against crypto assets in the UAE,” said
Divya Abrol Gambhir, partner, banking at Al Tamimi and Company, said the new
reforms do not make a distinction on accepted and banned cryptocurrencies but
rather the focus is on activities that may, or may not, be conducted within the
Meanwhile, Kemp said there are no direct bans on specific cryptocurrencies.
“Rather, the new laws require persons engaging in crypto-related activities such
as offering, issuing, promoting, listing and trading of cryptocurrencies, to be
licensed by the Securities and Commodities Authority (SCA), and to obtain
approval of offering documentation and other aspects of their operations.
New policies were introduced to regulate cryptocurrencies in the UAE
The most significant regulation recently
introduced in the UAE is Decision No. 23 of 2020 of the Securities and
Commodities Authority (SCA) concerning Crypto Assets Activities Regulation
which came into effect on November 1, 2020.
The Regulation governs
virtually all dealings relating to Crypto Assets including offering,
issuing, promoting, listing and operating exchanges for the trading of
Crypto Assets (including cryptocurrencies), and related activities.
All of these activities will require persons to be authorised by the SCA
and will, it seems, be subject to the same rules applicable to traditional
The Regulation also reiterates and expands on existing regulations on
money-laundering and terrorism financing, for example by requiring that all
licensed persons treat clients transacting in Crypto Assets as ‘high risk’
for the purposes of client due diligence.
The Dubai World Trade Centre Authority and Binance, signed a preliminary
agreement to develop an industry hub for global virtual assets in the
emirate, aimed at accelerating their adoption in 2022 within the GCC region
Overview of the most recent updates to Online Security Law
The new Online Security Law takes effect on January 2, 2022, and is one of the
first comprehensive legal frameworks in the region to address the risks
associated with the use of online technologies, including the illegal use of
The new law replaces the previous 2012 law ‘Concerning Anti-Cybercrimes’ and
aims to enhance the protection of the public, private businesses and government
“Broadly, the new law provides for a wider range of hacking crimes, as well as
content-related crimes directed at the use of technology for illicit purposes
such as terrorism, disseminating false information or fake news, and other uses
that are contrary to public morals,” explained Josh Kemp, partner at ADG Legal.