The United Arab Emirates (UAE) is implementing new regulations to support the development of cryptocurrency and prevent digital currency scams targeting investors in the country.
Beginning January 2, 2022, individuals involved in crypto scams could face up to 5 years in prison and a fine of up to AED 1 million (approximately $272,000).
Prior to these changes, UAE laws prohibited the promotion of crypto without imposing penalties. Now, the country has introduced amendments to punish those who promote or encourage the use of cryptocurrency that is not officially recognized in the UAE or share misleading advertisements or inaccurate data about any product.
The new regulations will also penalize individuals who solicit funds from the public without the necessary authorization from regulatory authorities.
Last month, the UAE President introduced this new legislation as part of a series of legal reforms.
Similar to other countries, the UAE has seen a rise in crypto scams, including the highly publicized DubaiCoin scam, which claimed to be Dubai’s official cryptocurrency. It was later revealed as a fraudulent scheme, prompting the Dubai Government to issue an official statement dispelling the claims.
Kostubh Devnani, a dispute resolution lawyer at ADG Legal, stated, “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.”
While crypto is not recognized as legal tender in the UAE, there are no direct bans on cryptocurrencies. However, individuals engaging in crypto-related activities must obtain a license from the Securities and Commodities Authority (SCA) under the new law.
The UAE’s new Online Security Law, which replaces the previous ‘Concerning Anti-Cybercrimes’ law, is one of the region’s first comprehensive legal frameworks addressing the risks associated with the illegal use of cryptocurrencies and enhancing consumer protection.
This post originally appeared on BitcoinExchangeGuide.
