BitcoinMiddle EastRegulation
|3 min ReadUAE Law Triggers Bitcoin Ban Fears as Penalties Surge
Tariq Al-Saidi
Senior Analyst
Published
Jan 16, 2026
The United Arab Emirates has taken a hard turn on crypto. A sweeping new Central Bank law now makes it a potential crime to offer even basic Bitcoin tools without a license. Developers say it is so broad that it effectively bans self-custody for ordinary users. Dubai’s image as a global crypto capital is suddenly in question, and the stakes are enormous.
New Licensing Rules Criminalize Unapproved Crypto Tools
The Federal-Decree Law No. 6 of 2025 took effect on September 16 and replaces the 2018 banking framework. The shift is dramatic. The law expands licensing requirements across the entire digital finance stack and introduces harsh criminal penalties for anyone offering unlicensed financial activity. Fines run from AED 50,000 to AED 500 million, up to $136 million. Prison time is also on the table.
According to legal analysis from Gibson Dunn, Article 170 criminalizes all unlicensed financial services. What makes this moment historic is that the penalties apply not only to companies offering financial products but also to anyone “facilitating” them through technology. That captures infrastructure, APIs, wallet software and even analytics tools.
Self-custody, one of Bitcoin’s core principles, is now in the line of fire. Developer Mikko Ohtamaa warned that the law “makes it a crime” to offer self-custodial Bitcoin wallets, blockchain explorers or market-data tools like CoinMarketCap unless licensed by the UAE Central Bank. Article 62 gives regulators authority over any technology that “engages in, offers, issues, or facilitates” a financial activity, directly or indirectly. If a product is accessible to a UAE resident, even if operated abroad, it may be considered in violation.
Communications, Marketing and Simple Access Could Be Penalized
A second major shift arrives with Article 61. It designates advertising, marketing or promoting a licensable financial activity as a regulated activity itself. That means global crypto teams could face penalties simply for sending a newsletter, publishing a website or posting a tweet that promotes an unlicensed product accessible inside the UAE.
Gibson Dunn notes the rule “materially broadens” the regulatory perimeter. Communications originating overseas but reaching UAE residents could fall under the law. For crypto developers, exchanges and wallet providers, this creates significant compliance risk. The UAE has one of the world’s strictest digital control regimes, and this move fits that pattern. Even WhatsApp calls remain blocked nationwide.
A Test for Dubai’s Crypto Hub Ambitions
For years the UAE marketed itself as one of the most attractive destinations for blockchain companies. Dubai’s VARA and Abu Dhabi’s ADGM built friendly licensing regimes and drew global talent. But federal law overrides free-zone rules. This new Central Bank law applies everywhere, including the UAE’s crypto-friendly zones.
The industry now wonders whether developers and exchanges will restrict access for UAE users rather than attempt compliance under a law with such sweeping reach. Similar patterns have appeared in countries pressured by the FATF to curb self-custody.
Entities have one year from the effective date to seek licenses, though the Central Bank may extend the deadline. Over the coming months, regulators will publish more detailed rules. For now, the crypto industry is staring at one of its toughest regulatory landscapes yet, and Dubai’s future as a global crypto hub hangs in the balance.
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