Featured News Headlines
UAE Central Bank Law Expands Penalties for Unlicensed Crypto Activity
The United Arab Emirates (UAE) has rolled out one of its most significant regulatory overhauls in years, leaving crypto developers warning that it effectively amounts to a ban on self-custody. The move raises urgent questions about Dubai’s standing as a leading global crypto hub.
Central Bank Law Tightens Crypto Rules
Set to take effect on September 16, 2025, the newly enacted Federal-Decree Law No. 6 dramatically expands licensing requirements for crypto activities. Under the law, offering even basic cryptocurrency tools—such as Bitcoin wallets or blockchain explorers—to UAE residents without authorization could be considered a criminal offense.
This law replaces the 2018 banking regulations and introduces far-reaching consequences. According to legal analysis from Gibson Dunn, Article 170 criminalizes all unlicensed financial activity, with penalties ranging from AED 50,000 to AED 500 million (approx. $136 million), including potential imprisonment.
Self-Custody Tools Under Threat
The most controversial aspect is the impact on self-custody solutions. Developer Mikko Ohtamaa warned that offering self-custodial Bitcoin wallets, market-data platforms, or blockchain explorers without a Central Bank license could now be treated as a crime. Article 62 empowers the Central Bank to regulate any technology that “engages in, offers, issues, or facilitates” a financial activity, covering everything from API services and wallet providers to decentralized protocols.
Advertising and Marketing Also Regulated
The law further expands regulatory reach via Article 61, categorizing marketing, promotion, and communication of financial products as a regulated activity. This means that even simple actions like sending emails, posting tweets, or hosting websites about unlicensed crypto services available in the UAE could violate the law.
Implications for Dubai’s Crypto Ambitions
Dubai has long positioned itself as a global blockchain innovation hub, with initiatives like VARA and ADGM offering crypto-friendly frameworks. However, federal law now supersedes free-zone rules, applying nationwide and potentially forcing developers and exchanges to reconsider service availability for UAE users.
Entities have one year to comply with licensing rules, with further regulations expected to clarify practical applications. The coming months will be critical in determining whether Dubai can maintain its crypto-friendly reputation under these stringent new federal measures.
