Digital Assets Laws & Regulations

United Arab Emirates

Chapters & Answers

12 chapters with 52 sections

1.1

What is the general regulatory environment for digital assets in your jurisdiction?

The United Arab Emirates (UAE) is a federation of seven Emirates, including Dubai, Abu Dhabi, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah. At the heart of the UAE’s legal system is the Constitution. The Constitution divides responsibility of defined areas of law between Federal and Emirate governments. This comprehensive legal system can be divided into two different categories: 1. UAE Federal Laws: which apply in each Emirate and their respective free zones (unless explicitly expressed not to). The federal government enacts broad codes that apply to civil, commercial and penal laws and procedures and these laws are made through a process that is prescribed by the Constitution. 2. Emirate level laws: where each Emirate has the authority to establish its own legal framework. Emirate laws and regulations emanate from the Ruler of the Emirate or statutory bodies of the Emirate empowered by the Ruler. Often Emirate laws implement the laws set at Federal level. Unlike common law countries such as the United Kingdom (UK), mainland UAE is a civil law jurisdiction with statutory federal codes, such as civil, commercial, civil procedures and penal. The UAE is home to two international financial free zones: the Dubai International Financial Centre (“DIFC”), located in the Emirate of Dubai, and the Abu Dhabi Global Market (“ADGM”), located in the Emirate of Abu Dhabi. Consequently, in practice, the UAE comprises three distinct jurisdictions, each with its own legal framework and financial regulatory authorities: (i) the DIFC; (ii) the ADGM; and (iii) mainland UAE (excluding the DIFC and the ADGM). As regards digital assets, all three jurisdictions have comprehensive and be-spoke regulatory frameworks to govern such activities, including a defined taxonomy that classifies different types of digital assets. The regulations specify a general prohibition on conduct of regulated activities relating to digital assets without an appropriate license from the relevant regulator. For entities seeking to establish a digital asset business in the UAE, the starting point is selecting the appropriate jurisdiction for establishment. Each of DIFC, ADGM and mainland UAE offer be-spoke licensing options, which must be assessed in light of the proposed business model and target market. UAE is uniquely equipped with a dual legal system — whereby civil law is applied in Mainland Dubai and most commercial free zones, and a common law-based framework is applied in the DIFC and ADGM, offering flexibility and easing the ability to conduct business. With a pro-business regulatory framework, state-of-the-art facilities, and access to a highly skilled and diverse workforce, UAE provides a fertile ground for digital assets services to thrive. Two developments in the area of digital assets have been particularly significant since 2024. First, the DIFC enacted DIFC Law No. 2 of 2024 (Digital Assets Law), a law that characterizes digital assets as intangible property, defines “control,” and sets default rules for title, transfer, remedies and security interests, together with amendments across DIFC contract, damages, insolvency, trust, foundations, security and negotiable instruments laws. Second, the ADGM FSRA implemented amendments to its digital assets framework on 10 June 2025, following Consultation Paper No. 11 of 2024, refining virtual asset approval processes and revising capital and fee schedules. The courts in the UAE have also begun to resolve substantive digital asset disputes. In Gate MENA DMCC (Huobi OTC) and Huobi MENA FZE v Tabarak Investment Capital Limited and Thurner (DIFC Court of Appeal, Judgment No. 002/2023, 13 June 2024), the court confirmed that Bitcoin is “property” under DIFC law and examined the nature of custody and control in crypto transactions. In parallel, the DIFC’s Digital Economy Court (DEC) has adopted bespoke procedural rules (Part 58 of the RDC) with express powers over digital assets, including orders directing the operation or cancellation of digital assets using keys or access credentials.

Contributing Editors

Max Davis

Al Tamimi & CO

Max specialises in high value, multi-jurisdictional disputes involving fraud, corruption and asset tracing, with a particular focus on digital assets. He acted for the Claimants in the landmark cryptocurrency recovery case which was the first of its kind before the DIFC Court of Appeal, and which is helping to shape the digital assets legal framework in the region. Max also co-authored multiple versions of the UAE chapter of the Virtual Currency Regulatory Review and a founder member of the Crypto Fraud and Asset Recovery (CFAAR) Network Middle East. Max has extensive experience of complex multi-party arbitrations in the UK, Middle East and Singapore.

Divya Abrol Gambhir

Al Tamimi & CO

Divya Abrol Gambhir is a Partner in the Banking and Finance Department and leads the Firm’s financial regulatory practice in the UAE. She has been practising in the region since 2005 and has extensive experience in specialised areas such as the Regulatory Practice, Private Banking, Structured Finance, Capital Markets including Debt Capital Markets, in addition to general corporate banking and advisory. Divya regularly advises on matters relating to licensing of financial institutions and the provision of financial services in the UAE and the DIFC, banking M&A and restructuring, conduct of business, compliance and AML matters and on FinTech matters. She has in depth knowledge of the legal and commercial aspects of the private banking industry and frequently acts for financial institutions in connection with complex private banking products and structures to secure facilities. She has built a reputation for delivering practical and commercially viable advice. As part of a secondment by the firm to Nasdaq Dubai, she was involved in the legal aspects of setting up the stock exchange in the Dubai International Financial Centre including trading, clearing, settlement, membership etc.

Praveena Pechetti

Al Tamimi & CO

Praveena is an Associate based in our Dubai office and a member of the Banking and Finance Team. She works on a diverse range of financial regulatory matters and is experienced in representing clients before various GCC financial regulators. Praveena has helped several financial companies including virtual assets service providers establish presence in the UAE and obtain financial licenses. Prior to this, Praveena worked with leading law firms in India where she gained experience in advising on M&A transactions. Praveena advises a range of financial institutions/ intermediaries including banks, NBFIs, exchanges, broker-dealers, asset managers, fund managers, fintech and emerging technology companies.

Digital Assets Laws & Regulations

Chapters & Answers

Introduction

What is the general regulatory environment for digital assets in your jurisdiction?

Regulatory Framework

Market Access and Licensing

Security and Consumer Protection

Blockchain and Smart Contracts

Cross-Border and International Considerations

Investment and Fundraising

Taxation

Enforcement and Dispute Resolution

Opportunities and Challenges

Emerging Trends

Conclusion