In Brief:
- Crypto disputes with a UAE nexus are no longer only a question of blockchain tracing. The practical issue is often whether there is a UAE touchpoint that can be used to preserve assets, obtain disclosure, engage a regulator or seek urgent relief.
- Recent UAE virtual asset enforcement developments, including VARA’s Investor and Marketplace Alert concerning entities commercially advertising as “KuCoin”, matter beyond compliance. They show how regulatory status, promotion into the UAE and the location of users can become central to investigations, disputes and recovery strategy.
- The UAE remains crypto-friendly and is no longer compliance-light. When a crypto matter has a UAE dimension, the practical analysis usually turns on three questions: which UAE regulatory framework applies, whether assets or evidence can be preserved quickly enough, and whether the crypto has touched an exchange, custodian, bank account or other recovery point that the law can reach.
The first task is jurisdictional mapping
There is no single UAE crypto regime. The appropriate route depends on the facts.
Dubai will generally require consideration of VARA (Virtual Assets Regulatory Authority), except in the DIFC. The DIFC has its own DFSA (Dubai Financial Services Authority) regime. ADGM has the FSRA (Financial Services Regulatory Authority). Wider onshore UAE issues may also bring in the federal capital markets framework, the Central Bank of the UAE and, where fraud or misappropriation is alleged, Public Prosecution and other criminal channels.
This matters because the regulatory map is not a set of rulebooks. It is the first part of the recovery strategy telling you which regulator, court or institution may be able to compel action.
That is particularly important where a platform, exchange, custodian, promoter, defendant, bank account or asset sits in the UAE. If the matter touches Dubai, the DIFC, ADGM or the wider onshore UAE, the available route may change materially. The VARA and DFSA memorandum of understanding of 15 October 2025 also reflects a more coordinated supervisory environment, including cooperation around licensing, supervision, enforcement, financial crime and information exchange.
For operators, this means permissions must match the activity actually being carried on. For claimants and foreign counsel, it means the first question is not “which claim do we bring?” but “which UAE touchpoint can we use, and who can act on it?”
Preservation depends on speed and the available forum
Crypto cases are time-sensitive. Assets can move quickly between wallets, exchanges and jurisdictions. The early strategy is often more about preservation, less about merits.
The immediate questions are practical. Is there a UAE-based exchange or custodian? Has crypto been converted into fiat and moved into a UAE bank account? Is there a UAE defendant, company or asset? Is the better first step civil relief, a criminal complaint, regulator engagement, or a combination?
The answer will usually depend on the UAE nexus. Where there is a sufficient connection, the toolkit may include freezing relief, interim injunctions, disclosure orders, regulator engagement and criminal complaints. Where there is no meaningful touchpoint, options narrow quickly and the matter becomes more dependent on blockchain analysis, offshore coordination and speed.
The DIFC has become particularly important in this context. In Trafigura PTE Ltd and Trafigura India PTV Ltd v Prateek Gupta and Ginni Gupta [2025] DIFC CA 001, the DIFC Court of Appeal confirmed the Court’s jurisdiction and power to grant freezing orders, with ancillary disclosure, in support of foreign proceedings that may produce a judgment enforceable through the DIFC and Dubai Courts enforcement framework and, where applicable, elsewhere in the UAE. The Guptas later brought an application before the Conflict of Jurisdiction Tribunal concerning the DIFC freezing order and related Dubai Court proceedings. That application was rejected. The Trafigura principle therefore now has both DIFC appellate authority and a supportive CJT decision on the jurisdictional-conflict point.
The practical point is clear. Preservation strategy cannot wait until the factual picture is complete. In crypto matters, by the time the picture is complete, the assets may have moved.
Exchange-based recovery may be the practical bridge
Blockchain analysis can identify movement. Legal recovery usually requires an intermediary, asset or person that can be reached.
This is why exchange-based recovery is often the most practical route. A centralised exchange or custodian may hold KYC information, account records, transaction logs, wallet addresses, bank account details, internal alerts and other evidence linking on-chain movement to a real-world person or account. If the exchange or custodian has a UAE nexus, that can create a path to disclosure, preservation or regulatory engagement.
The proprietary status of digital assets is also important. In Gate MENA DMCC (formerly Huobi OTC DMCC) and Huobi MENA FZE v Tabarak Investment Capital Limited and Christian Thurner [2023] DIFC CA 002, the DIFC Court of Appeal accepted that Bitcoin is property under DIFC law. The property point matters. It helps frame the legal analysis around ownership, control and the remedies that may be available where digital assets can be brought within the reach of the court.
DIFC Law No. 2 of 2024, the Digital Assets Law, sits alongside that analysis by providing a statutory framework for the proprietary treatment, ownership and control of digital assets. For a claimant, this helps move the discussion from an abstract debate about tokens to a practical legal question: who controls the asset, where did it move, and what order or channel can reach it?
Once crypto is off-ramped into fiat, the exercise transforms again. The focus may shift from wallet tracing and exchange disclosure to bank account tracing, freezing relief, fraud claims, criminal complaints and enforcement against conventional assets. If assets move into unhosted wallets, meaning self-custody wallets where the user controls the private keys directly, the absence of an intermediary may make preservation harder. In those cases, the strategy often depends on identifying the next exchange, custodian, bank or other touchpoint.
What this means in practice
For claimants, investors and foreign counsel, the first move in a UAE-nexus crypto matter should be fast and disciplined. Identify the touchpoint. Preserve the evidence. Map the exchange, custodian and bank routes. Consider civil, criminal, regulatory and forensic steps together rather than sequentially.
For operators, the message is narrower. Permissions must match the activity that is actually conducted, not the activity described at group level. Marketing, promotion or solicitation into the UAE or to its nationals and residents may itself raise regulatory issues, depending on the activity, audience and applicable regulatory perimeter. Governance, records and financial crime controls are not only compliance artefacts. They are the materials that will be examined when a matter turns contentious and will shape what a regulator or court is able and willing to do.
In UAE-nexus crypto disputes, the advantage is usually with the party that identifies the touchpoint, preserves the evidence and moves before the assets move again.
For more information or queries please contact Karim Mahmoud, Partner, Dispute Resolution at k.mahmoud@hadefpartners.com, or Damian Wright, Senior Counsel, Dispute Resolution at d.wright@hadefpartners.com.
This article is intended for general informational purposes only and does not constitute legal advice. Readers should seek independent legal counsel in relation to their specific circumstances.