Leading legal experts have warned that cybercriminals operating cryptocurrency scams in the UAE could face detention for up to five years and/or a fine of between Dh250,000 and Dh1 million.
His Highness Sheikh Khalifa bin Zayed Al Nahyan, the President of the UAE, introduced the new legislations in November as part of a series of legal reforms.
“Under Article 48 of the Online Security Law, anyone who promotes, advertises, or encourages cryptocurrency dealings without being licensed, or without being officially recognized in the UAE, is subject to detention and a fine between Dh20,000 and Dh500,000,” said Josh Kemp, partner at ADG Legal.
Under the new law, anyone who runs a crypto scam online could be prosecuted in addition to any fraud scheme being illegal under the Penal Code.
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Under Article 40, online means would likely be used to obtain a benefit fraudulently. Under Article 41, an online scheme would take place through the creation of a false company or portfolio to receive funds from the public for investment, management, utilisation or development.
Kostubh Devnani, dispute resolution lawyer at ADG Legal, explains that Article 40 carries a penalty of up to one year detention and/or a fine of up to half a million dirhams. Meanwhile, Article 41 carries a penalty of up to five years detention and/or a fine of between 250,000 and 1 million dirhams.