Is it illegal to trade in cryptos in absence of regulations in the UAE?
Cryptocurrencies are new to our world, hence, they are not regulated in most of countries. Therefore, the question arises, whether it is legal to trade in cryptos when there are no regulations in place.
“The answer is no. There is nothing in the UAE law, right now, that prohibits a person from lawfully purchasing crypto assets, subject to existing laws of course. Meaning, if one broke the existing UAE laws in obtaining crypto assets (i.e. committed theft or fraud act) that makes the possession of those assets illegal,” says Irina Heaver, Partner and Head of Commercial & Technology at Fichte & Co., a legal firm based in Dubai.
According to Heaver, any legal dispute related to crypto assets will be handled “in exactly the same way as any other dispute.”
“Cryptos are a speculative asset class and is currently drawing attention of a lot of ‘shady characters’. Should you decide to jump on the crypto bandwagon, please ensure to conduct extra due diligence, consult your lawyers when handling large transactions, and please remember two of the oldest investment rules ‘caveat emptor’ and ‘never invest more than you can afford to lose’”, she advised investors in trading of virtual currencies.
Some love it, some hate it. The business world seems to be divided into the two camps: those who claim it is a Ponzi scheme to those who are firm believers. Some governments already took steps to outlaw the digital currencies, whereas the UAE authorities indicated that they will regulate the market at some point in the future, she added.
An Australian qualified lawyer with over 14 years of experience, Irina Heaver regularly represents emerging technology business such as IT infrastructure and cloud services, software and tech development companies, blockchain and AI enterprises, e-commerce and online marketplaces among others.
When asked is there a future for cryptocurrencies, Irina Heaver says, “There is definitely one, but as they say: ‘Predictions are hard, especially about the future’. I speculate that cryptos won’t remain in the shape or form that they are in now. The market leader of today – Bitcoin – might just as well be forgotten in a few years’ time. New technology and better value proposition are being developed constantly. There are over 2,000 digital tokens already, each offering some sort of unique value proposition (or so they claim).”
She believes that crypto assets are here to stay. The blockchain technology – being the technology that underlines their existence – democratized and decentralized an entirely new financial asset class. Value can be exchanged directly between people without the need for the middleman, this, of course, leaves traditional ‘middlemen’, ie financial institutions, puzzled.
“However, I don’t believe that the UAE financial institutions will sit on the sidelines much longer. Dubai leadership has rolled out Blockchain Strategy well ahead most of the world, so the value and benefit of the technology are already very well understood and even applied in some cases.
“I strongly believe that the UAE is perfectly positioned to be the Crypto Financial Centre at par with Singapore and Switzerland. Liberal and certain legislative regime and buy-in from the authorities will allow the inflow of innovative blockchain businesses and capital,” she added.