Sweeping UAE cryptocurrency regulations could expose foreign entrepreneurs to criminal prosecution, enormous fines and asset seizures, against a troubling history of allegations involving stolen businesses, coerced investors and the misuse of criminal proceedings warns Crypto and technology justice expert Radha Stirling. Stirling founded Detained in Dubai, Due Process International and Crypto Legal Advocacy Network (CLAN). She is a leading specialist in legal and practical risks facing cryptocurrency and technology entrepreneurs.
The United Arab Emirates is inviting the world's cryptocurrency and technology entrepreneurs to build their fortunes in Dubai, but Radha Stirling warns that sweeping new financial regulations could leave some facing imprisonment, devastating fines and the loss of their businesses.
The UAE's new capital markets legislation and expanded 2026 Virtual Assets Framework have significantly increased the activities requiring regulatory approval, strengthened enforcement powers and introduced severe penalties for certain violations. Stirling warns that the legislation could create additional opportunities for commercial disputes to escalate into criminal investigations, placing entrepreneurs, their assets and potentially their freedom at risk.
Stirling, founder of Detained in Dubai and Due Process International, has spent more than two decades assisting individuals facing serious legal issues including extradition. Through her career, she has represented and assisted tech entrepreneurs and crypto experts including Christopher Emms and bitcoin.com founder Roger Ver.
She warns that the expansion of regulatory enforcement powers must be considered against a history of commercial disputes escalating into criminal allegations, asset freezes, travel bans and detention.
Under the UAE's expanded capital markets legislation and its 2026 Virtual Assets Framework, the Capital Market Authority has broadened the categories of regulated virtual asset activities from three to eight. These include cryptocurrency dealing, custody, arranging custody and investment transactions, investment advice, portfolio management and operating trading facilities.
The significance is that businesses involved in arranging transactions, advising clients or providing certain supporting financial services may now fall within licensing requirements, even where they do not operate a conventional cryptocurrency exchange.
Federal Decree-Law No. 33 of 2025 provides for criminal penalties for certain unlicensed financial activities, including potential imprisonment and fines reaching AED 250 million.
The legislation also provides for substantial administrative penalties and regulatory intervention. Under Article 73, courts may order confiscation of funds and seized assets following criminal proceedings, while Article 74 extends penalties and sanctions to individuals who collude, instigate, cause or participate in offences or violations.
This potentially exposes not only business owners but also executives, advisers, consultants and other participants where their conduct is found to contribute to a regulatory violation.
Stirling fears that these powers could become another means of targeting successful foreign entrepreneurs, particularly where commercial disputes involve influential local parties.
"Dubai has spent decades encouraging foreigners to bring their money, expertise and businesses into the country. But we have repeatedly dealt with cases where entrepreneurs have faced threats, criminal allegations, frozen assets and attempts to take control of what they have built.
"Now the UAE is inviting cryptocurrency developers, blockchain innovators and AI entrepreneurs to bring their intellectual property and digital wealth into the country. They need to understand the risks before placing their businesses and their freedom within reach of these enforcement powers," Stirling said.
Stirling warns that the expanded definition of regulated activities creates particular risks where business relationships deteriorate.
A cryptocurrency entrepreneur could establish a company believing it provides technology or consultancy services, only for regulators to determine that aspects of its operations constitute unlicensed investment advice, transaction arranging or another regulated financial activity.
A complaint from a disgruntled investor, commercial rival or former business partner could potentially trigger an investigation, with the entrepreneur facing business disruption, financial penalties and possible criminal proceedings if a violation is established.
Even without a conviction, the investigation itself could threaten the company's survival.
"The concern is not simply whether someone has breached a licensing requirement. It is what happens when an allegation is made, who controls the investigation and whether an entrepreneur can protect their business and assets while defending themselves."
Stirling draws parallels with Dubai's previous investment booms, when foreign businesspeople were encouraged to invest in property, establish companies and develop ambitious commercial projects.
Following the 2008 financial crisis, many investors and entrepreneurs found themselves facing criminal proceedings over debts and financial disputes, with some unable to leave the country.
Detained in Dubai has also assisted in cases where entrepreneurs were invited to present business proposals to individuals within the royal family, government institutions and influential Emirati investors, only to subsequently discover that their ideas had been appropriated.
Others have reported investing substantial sums in UAE businesses before encountering threats, attempts to seize control of their companies or criminal complaints arising from commercial disagreements.
In some cases, entrepreneurs have felt compelled to flee the country to avoid possible imprisonment, leaving behind investments and assets they could no longer effectively protect.
"One of the most effective ways to take someone's business is to make them afraid to remain in the country," Stirling said.
"If an entrepreneur believes they could be arrested over a commercial dispute, they may leave everything behind to protect their freedom. Once they are outside the UAE, recovering their business, property or investment can become extraordinarily difficult and they can be wrongfully placed on INTERPOL.
"We have seen how the threat of criminal proceedings can be used as commercial leverage and we have no doubt these expanded regulatory powers create further opportunities for that kind of abuse."
Unlike traditional property investments, cryptocurrency holdings can be transferred rapidly, and technology companies derive much of their value from source code, proprietary systems, algorithms and intellectual property.
Stirling says her clients have been detained or pressured to surrender control of digital assets. She believes these experiences warrant particular scrutiny as the UAE expands its regulatory framework.
The potential exposure of individuals working alongside regulated businesses is another concern. Developers, consultants, advisers and employees may need to establish whether their activities fall within licensing requirements or could expose them to allegations of assisting an unlicensed operation.
The precise scope of individual criminal liability depends on the applicable law and the person's conduct. Nevertheless, Stirling argues that entrepreneurs need clear regulatory boundaries and meaningful safeguards against unfounded allegations. The UAE has a history of passing vaguely worded legislation that can criminalise everyone. The federal cybercrime laws are a perfect example.
Stirling emphasises that legitimate regulation of cryptocurrency markets is necessary to combat fraud, money laundering and financial crime. Her concern is that the UAE provides insufficient protection against the misuse of those laws.
She is calling for greater transparency around asset seizures, independent oversight of regulatory enforcement, effective judicial remedies and safeguards preventing commercial complaints from being weaponised.
"Dubai cannot have it both ways. It cannot promote itself internationally as a safe haven for entrepreneurs while failing to address the risks of arbitrary detention, commercial coercion and asset appropriation.
"Technology entrepreneurs should not have to gamble their freedom or their intellectual property on the goodwill of a business partner or the discretion of an enforcement authority.
"Before bringing valuable technology or digital assets into the UAE, founders should ask a simple question: if a powerful person decides they want my business, what protection do I actually have?"
ENDS
About Radha Stirling
Radha Stirling is the founder of Detained in Dubai and Due Process International, a human rights advocate and extradition expert witness with more than 20 years' experience assisting victims of arbitrary detention, criminalised commercial disputes, INTERPOL abuse and miscarriages of justice.
