UAE’s New Law Sparks ‘Bitcoin Ban’ Fears After Harsh Penalties
The United Arab Emirates (UAE) has launched one in every of its most sweeping regulatory overhauls in years, and crypto builders say it quantities to a de facto ban on self-custody.
This new shift raises pressing considerations for Dubai’s standing as one of many world’s prime crypto hubs.
UAE Rewrites the Rules for Crypto Access
A newly enacted Central Bank regulation, efficient September 16, dramatically expands licensing necessities. Specifically, it renders it a possible felony offense to supply even fundamental cryptocurrency instruments, similar to Bitcoin wallets or blockchain explorers, to UAE residents with out authorization.
The Federal-Decree Law No. 6 of 2025, revealed within the UAE’s Official Gazette, replaces the 2018 banking regulation and introduces a much more aggressive regulatory perimeter.
While earlier guidelines required licensing for entities providing regulated monetary actions, they didn’t impose felony penalties for non-compliance.
According to authorized analysis from Gibson Dunn, Article 170 now criminalizes all unlicensed monetary exercise. Penalties vary from imprisonment to fines between AED 50,000 and AED 500 million (as much as $136 million).
What stands out is that these penalties apply to firms providing monetary merchandise, and in addition to anybody facilitating them via know-how.
Self-Custody Tools Now Fall Under the Licensing Net
This is the place the crypto business sees the largest shock.
Developer Mikko Ohtamaa warned that the regulation “makes it against the law” to supply self-custodial Bitcoin wallets, blockchain explorers, and even market-data instruments like CoinMarketCap with out a license from the Central Bank.
“Only Bitcoin you’re allowed to personal is one permitted by the Central Bank of the UAE,” he wrote, highlighting how broad the language is.
The related provision, Article 62, expands the Central Bank’s authority to cowl any know-how that “engages in, gives, points, or facilitates” a monetary exercise, immediately or not directly.
That consists of infrastructure suppliers, API services, pockets builders, analytics platforms, and decentralized protocols.
In follow, because of this even firms exterior the UAE, if their product is accessible to UAE residents, could also be thought of in violation.
A New Crackdown on Communications and Marketing
Another main shift arises from Article 61, which defines promoting, advertising, or selling a licensable monetary exercise as a regulated exercise.
That means merely sending an e-mail e-newsletter, internet hosting a web site, and even publishing a tweet about an unlicensed monetary product accessible within the UAE could possibly be handled as a authorized breach.
Gibson Dunn notes that this provision “materially broadens” the UAE’s regulatory perimeter, capturing communications originating from overseas. For international crypto firms, this represents a major compliance threat.
What It Means for Dubai’s Crypto Ambitions
The UAE has spent the previous a number of years branding itself as a worldwide vacation spot for blockchain innovation. It established friendly licensing frameworks via monetary free zones, similar to VARA in Dubai and ADGM in Abu Dhabi.
However, as a result of federal regulation supersedes free-zone guidelines, the brand new Central Bank regulation applies all over the place, even inside Dubai’s crypto-friendly jurisdictions.
Nonetheless, the newest flip is in line with the UAE’s broader historical past of tight digital restrictions, noting that even WhatsApp calls stay blocked nationwide.
The concern now’s whether or not builders, exchanges, and pockets suppliers will withdraw companies from UAE customers to keep away from compliance threat. Notably, this sample is noticed in jurisdictions under pressure from the FATF to limit self-custody.
Entities have one yr from the regulation’s efficient date to fulfill licensing necessities, although this era could also be prolonged on the Central Bank’s discretion.
Over the approaching months, the UAE will launch further laws that outline how these guidelines are utilized in follow.
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