UAE’s New Law Sparks ‘Bitcoin Ban’ Fears After Harsh Penalties
A new UAE Central Bank law imposes strict licensing and harsh criminal penalties, leading to fears of a de facto ban on self-custody crypto tools.Summary
The United Arab Emirates (UAE) enacted Federal Decree-Law No. 6 of 2025, significantly overhauling financial regulation and causing alarm among crypto developers who see it as a de facto ban on self-custody. Effective September 16, the law mandates licensing for offering basic crypto tools like Bitcoin wallets or blockchain explorers to UAE residents, with non-compliance now carrying criminal penalties, including imprisonment and massive fines up to AED 500 million ($136 million).
Legal analysis highlights that Article 170 criminalizes all unlicensed financial activity, applying to anyone facilitating these activities through technology, potentially affecting even foreign companies whose products are accessible in the UAE. Furthermore, Article 62 broadly expands the Central Bank's authority to cover any technology that facilitates a financial activity, directly or indirectly, encompassing infrastructure providers, API services, and wallet developers. Article 61 also criminalizes advertising or promoting unlicensed financial activities, meaning simple communications like newsletters or tweets could constitute a breach.
This federal law supersedes existing free-zone rules, impacting Dubai's crypto ambitions despite its efforts to become a hub. While entities have one year to comply, the broad language raises concerns that developers and service providers may withdraw services from UAE users to mitigate compliance risks, mirroring actions seen in jurisdictions pressured by the FATF regarding self-custody.
(Source：BeInCrypto)