UAE Crypto Crackdown: Bitcoin Wallets Face License Risk
The UAE’s new Federal-Decree Law No. 6 of 2025, effective 16 September, marks a sharp crypto crackdown. Article 62 brings Bitcoin wallets, APIs, blockchain explorers and analytics platforms under Central Bank regulation. Unlicensed providers face fines from AED 50,000 to AED 500 million and potential imprisonment. Article 61 further extends licensing to all marketing, promotions and online posts about crypto services. The law’s broad jurisdiction covers any crypto tool accessible in the UAE, including open-source wallets and analytics sites like CoinMarketCap. Dubai’s free-zone frameworks, such as VARA and ADGM, lose protection under the new federal rules. Developers and content creators worldwide must weigh the risk of incidental access by UAE users. Entities have one year until September 2026 to comply. Market experts warn this global tech enforcement may force some providers to withdraw services, reshaping infrastructure development and compliance costs.
Bearish
This UAE crypto crackdown introduces significant regulatory risk. The licensing requirement and harsh penalties may deter developers and service providers from serving UAE markets. In the short term, traders may face reduced access to tools and platforms, increasing volatility in crypto markets. Historically, similar crackdowns—such as China’s 2021 crypto ban—led to market sell-offs and liquidity drops. Long-term, the shift may push projects to enhance compliance infrastructure, raising costs and centralizing services. The unprecedented global reach of the law means incidental exposure to UAE users could trigger penalties, encouraging firms to geo-block UAE access or withdraw entirely. This uncertainty is bearish for market sentiment and may suppress trading volumes and innovation until clearer guidelines emerge by 2026.