Legal Regulation and Control in the Sphere of Virtual Asset Circulation in the UAE (Actual Problems of Russian Law)

Summary

• The UAE economy attracted over 56 млрд долл. США in crypto assets during 2024–2025.p.2
• Decision No. 04/RM of 2026 defines 8 types of licensed activities for virtual asset service providers.p.5
• Unlicensed financial activity under Article 71 of Federal Decree-Law No. 33 of 2025 incurs imprisonment for not less than 1 year and/or a fine of up to 250 млн дирхамов.p.11
• The maximum administrative fine for conducting unlicensed financial activity was raised to 1 млрд дирхамов under Central Bank regulations.p.12
• From August 2024 to August 2025, VARA applied enforcement measures against 36 organizations, with fines ranging from 50 000 to 600 000 дирхамов.p.14

Key insights

1. The UAE governs virtual assets through a multi-jurisdictional system divided across federal, emirate, and free financial zone levels.p.3
2. UAE legislation avoids the term cryptocurrency and instead uses virtual asset as its core statutory category, which is legally distinct from money.p.3
3. Payment tokens are classified as a specific subtype of virtual assets tied to fiat currencies and placed under the jurisdiction of the Central Bank of the UAE.p.3
4. Federal legislation explicitly classifies investment-oriented virtual assets as financial products subject to Capital Market Authority supervision.p.4
5. Free financial zones like DIFC and ADGM are excluded from federal civil and commercial laws and operate directly under English common law.p.7
6. Central Bank regulations prohibit algorithmic stablecoins and privacy-enhancing tokens in the payment ecosystem.p.12
7. VARA officers possess law enforcement capabilities to inspect licensed entities, demand documentation, and coordinate with police authorities.p.13
8. The polycentric distribution of regulatory authority across multiple jurisdictions creates internal risks of regulatory arbitrage.p.16