UNITED ARAB EMIRATES Law and Practice Contributed by: Stuart Paterson, Janine Mallis and Tania Forichon, Herbert Smith Freehills
This is provided in Article 120 of Federal Decree Law No 14 of 2018 (as amended) (the “Central Bank and the Organisation of Financial Facilities and Activities Law” ), which states that all data and information relating to customers’ accounts, deposits, safe deposit boxes and trusts with licensed financial institutions – in addition to all relevant transactions with customers – must be considered confidential in nature, and may not be made available or disclosed, directly or indi - rectly, to any third party without the written per - mission of the owner of the account or deposit, their lawyer or their authorised agent. In certain situations, as discussed in 2. Proce- dures and Trials , a court can order production where relevant to a claim. DIFC and ADGM Similarly, in the DIFC and ADGM, banking docu - ments are confidential and disclosure without consent is likely to be unlawful. However, pro - duction can be ordered in certain circumstanc - es, as discussed in 2. Procedures and Trials . 7.3 Crypto-Assets The Cybercrimes Law came into effect on 2 January 2022. While not specifically enacted to tackle cryptocurrency fraud, the Cybercrimes Law contains many offences commonly com - mitted by crypto fraudsters, including hacking and the fabrication of websites, mail, and elec - tronic accounts. It also criminalises unlicensed cryptocurrency trading and cryptocurrency’s unauthorised/unlicensed marketing. The UAE’s broader civil and criminal regime also applies to crypto-asset activities. Regulat - ed companies dealing with crypto-assets must comply with the UAE’s general AML/CFT laws.
In 2022, the DIFC Court heard a landmark case relating to the misappropriation of Bitcoin, one of the first cryptocurrency litigation disputes in the region. On 14 December 2022, the DIFC launched its specialist Digital Economy Court with specialised rules to protect the public against emerging threats such as cryptocur - The UAE Central Bank does not currently rec - ognise crypto-assets as legal tender. The DIFC Courts have accepted that cryptocurrencies are property following the English decision of AA v Unknown Persons (2019) EWHC 3556 (Comm). The DIFC Digital Assets Law, enacted in 2024, confirmed that “Digital Asset” is intangible prop - erty. rency fraud. Regulation The UAE’s virtual assets regulatory landscape is complex, with five (currently) virtual asset (VA) regulators. On 14 January 2023, new federal-level VA leg - islation was enacted, which does not apply to the ADGM and DIFC. In February 2023, the UAE Central Bank was replaced by the Securities and Commodities Authority (SCA) as federal regula - tor and supervisor of the cryptocurrency sector. The UAE Central Bank will regulate crypto-pay - ments. For example, in June 2024, the Cen - tral Bank introduced the Payment Token Ser - vices Regulation via Circular No.2/2024, which regulates the issuance of stablecoins. After a 12-month grace period, businesses will be allowed to accept crypto payments in dirham- backed stablecoins issued by Central Bank- approved entities. The DFSA also updated its rules in 2024 for stablecoin recognition.
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