Legal Advocacy Group Warns Tech Entrepreneurs Over UAE Virtual Asset Regulations

According to a release by legal advocacy organisation Detained in Dubai, updated financial regulations under the UAE's expanded 2026 Virtual Assets Framework and capital markets legislation significantly broaden regulatory oversight of technology and cryptocurrency enterprises. Radha Stirling, founder of Detained in Dubai, Due Process International, and the Crypto Legal Advocacy Network, stated that the strengthened enforcement mechanisms could expose foreign entrepreneurs to financial penalties, asset seizures, and criminal proceedings.

Under the UAE's updated framework, the Capital Market Authority has expanded the classification of regulated virtual asset activities from three categories to eight. The regulated activities include cryptocurrency dealing, custody, arranging custody and investment transactions, investment advice, portfolio management, and operating trading facilities. Detained in Dubai noted that companies providing advisory services or arranging transactions may now fall under mandatory licensing requirements, even if they do not run conventional digital asset exchanges.

Federal Decree-Law No. 33 of 2025 establishes criminal sanctions for certain unlicensed financial activities, providing for potential prison terms and fines of up to AED 250 million. Additionally, Article 73 of the legislation empowers judicial courts to order the confiscation of funds and seized assets following criminal proceedings.

Article 74 extends legal penalties and sanctions to individuals who collude, instigate, cause, or participate in regulatory offenses, potentially affecting corporate executives, advisers, and consultants. Stirling stated that commercial disagreements involving foreign entrepreneurs could risk escalating into criminal complaints, travel bans, and asset freezes under these expanded enforcement powers.