UAE Law and Practice Contributed by: Irina Heaver and Zainab Kamran, NeosLegal
legal recognition, enforceability would still depend on satisfying basic contract law requirements such as mutual consent and capacity. 1.1.5 Industry and Trade Bodies There are no self-regulatory organisations or formal trade associations representing the blockchain or vir- tual asset industry in the UAE. Regulatory oversight is provided exclusively by the competent government authorities, namely VARA, the FSRA, the DFSA, the CBUAE and the CMA. A number of for-profit marketing and networking organisations operate in the market, organising indus- try events, conferences and promotional activities, but these do not perform any regulatory, standard-setting or representative function and should not be confused with self-regulatory bodies. 1.2 Crypto-Assets 1.2.1 Property Considerations Property Treatment Onshore UAE Under UAE federal law, there is currently no specific definition of digital asset ownership, nor established criteria for determining it, and no clear case law has emerged on the point. In a recent update, VARA clari- fied that virtual assets may be classified as either objects or rights under the UAE Civil Transactions Law (Federal Law No 5 of 1985). This distinction directly affects how ownership is recognised, transferred and protected, and treatment will depend on the nature of the virtual asset and the legal context, to be assessed on a case-by-case basis. Financial Free Zones In the DIFC, ownership and control of digital assets are specifically addressed under the Digital Assets Law No 2 of 2024, effective 8 March 2024. Legal own- ership, namely title, of a digital asset is acquired when a person gains control of the asset and intends to exercise such control. Control is defined as the exclu- sive ability to prevent others from accessing, benefit- ing from or transferring the asset. A transfer of a digital asset is considered final when the transferee obtains control of the asset, for example through control of the relevant private key or access
mechanism, and the transferor has the intention to transfer title. ADGM does not specifically address the ownership of digital assets. Collateral Arrangements Onshore UAE There is no explicit legal or regulatory framework gov- erning the use of digital assets as collateral. Financial Free Zones In the DIFC, digital assets are legally recognised as a form of property and may be used in secured trans- actions, including as collateral, provided the security interest is properly structured and documented. The legal framework supports the creation, perfection and enforcement of such interests. In ADGM, while digital assets are regulated and recog- nised under the Virtual Asset Framework, there is no specific regulation addressing their use as collateral. Any such arrangement would need to be assessed on a case-by-case basis under existing commercial and There are no regulatory restrictions on the banking or payment partners that crypto-asset firms may use, nor on their ability to obtain general banking and pay- ment services. A number of UAE banks actively pro- vide services to regulated VASPs, with Zand Bank, the UAE’s first fully digital bank, among the most active in servicing the sector. In practice, access to banking for crypto-asset busi- nesses in the UAE is generally more straightforward than in many other jurisdictions. While some firms may encounter friction at the account-opening stage, this is not driven by any regulatory prohibition. Several crypto-friendly banks operate in the market and are well-versed in servicing the industry. 1.2.3 ESG/Sustainable Finance While there are no ESG or sustainable finance require- ments specifically applicable to digital assets at the federal level or within the financial free zones, VARA’s financial services laws. 1.2.2 Access to Banking
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