New UAE Law: Licensing Cryptocurrency and Web3 Without Exceptions
The United Arab Emirates is taking a decisive step toward fully and strictly regulating the crypto industry. The new law fundamentally changes the rules of the game for Web3, DeFi, and crypto projects, effectively removing the market from the gray zone and placing it under the supervision of the Central Bank of the UAE (CBUAE).
Crypto Market Under Full Regulatory Control
Now, any activity related to digital assets and bearing the hallmarks of a financial service is subject to mandatory licensing. The key point is that the degree of decentralization no longer matters. DAOs, autonomous protocols, on-chain solutions, and even projects without a legal entity are no longer considered exceptions. The argument "we just write smart contracts" no longer holds true.
The law also applies to foreign projects
The regulation applies to all companies whose products are available to UAE users. Having a front-end, marketing, advertising, using stablecoins, or accepting investments or liquidity from UAE residents automatically means operating in the UAE. This also applies to free trade zones—DIFC, ADGM, DMCC, and DWTC—previously considered a "safe haven" for crypto businesses.
Fines and Criminal Liability
The new regime is considered one of the harshest in the world. Operating without a license carries fines of up to 1 billion dirhams (approximately $272 million), as well as criminal liability. The risks for founders and teams are increasing dramatically, especially for projects with a global audience.
Almost all DeFi is subject to licensing
The law covers any solutions related to payments, asset exchange, lending, custody, and investment activities. This means that DEXs, AMM pools, lending protocols, custodial services, RWA platforms, market makers, tokenized products, and even bridges in some scenarios are subject to CBUAE requirements.
Marketing is considered a financial service
One of the most sensitive aspects is marketing. Website access from the UAE, social media advertising, email newsletters, local influencers, or an Arabic version of the interface are now considered licensed activities, even if the project does not have a legal entity in the country.
Transition Period and Loss of Crypto Hub Status
Projects have been given until September 2026 to determine their strategy: license, work through a local partner, limit marketing, or completely block access for UAE residents. Essentially, the Emirates is moving away from its "crypto paradise" image and toward a model of strict financial oversight comparable to Singapore.
What Projects Should Do Now
Foreign projects are already under threat: having a team, marketing, or simply making a product available from the UAE creates regulatory risks. In this situation, it is especially important to properly evaluate the business model and choose a safe path.
IT-OFFSHORE, experts in international structuring, licensing, and compliance, can help. IT-OFFSHORE will help you analyze risks, develop a sound strategy for working with the UAE, select a licensed partner, or intelligently limit your jurisdictional presence while preserving your business and reputation.
