Penalties for promoting unrecognized cryptocurrencies
In accordance with 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 who does so without a license, is subject to detention or a fine ranging from Dh20,000 to Dh500,000
The newly passed law makes it an offense to run a crypto scam online as well as all fraudulent schemes under the Penal Code.
Most likely, an online scheme would be run either under Article 40 for using online means to obtain a benefit, or under Article 41 for creating or managing a false company or portfolio to receive or collect funds for investment, management, utilization, or development.
In Article 40, the penalties are imprisonment for a minimum of one year and a fine between Dh 250,000 and Dh 1 million, while in Article 41 the penalties are imprisonment for up to five years and a fine between Dh 250,000 and Dh 1 million.
Combating cryptocurrency scams in UAE
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 UAE courts will inevitably adapt in the same way, perhaps most imminently in the DIFC and ADGM courts.
Are any cryptocurrencies banned in UAE?
Central banks worldwide are reluctant to endorse cryptocurrencies because of a lack of underlying value and regulatory oversight.
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 cryptocurrencies.
The new law replaces the previous 2012 law ‘Concerning Anti-Cybercrimes’ and aims to enhance the protection of the public, private businesses, and government from cybercrime.