Cryptocurrency scammers will face five years behind bars and fines of up to Dh1 million under tough new UAE laws protecting the public from financial fraud.
President Sheikh Khalifa announced the clampdown as part of sweeping legal reforms last month.
The new law broadens the country’s current cybercrime laws to include advertisements for rogue cryptocurrency schemes that are not recognized by UAE authorities.
According to article 48, posting misleading ads or inaccurate data online about a product will lead to jail time and/or a fine between Dh20,000 and Dh500,000,” said Dr Hassan Elhais of Al Rowaad Advocates.
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A similar penalty is imposed on members of the public who promote cryptocurrencies unrecognized by authorities in the country.”
Elhais explained that previous laws prohibited promoting cryptocurrencies, but didn’t penalize them.
Hassan Elhais, Senior Partner at Al Rowaad Advocates & Legal Consultants, in his office in Dubai on Thursday, March 31, 2016. Reporter Jenn Bell quoted Mr. Elhais in a story about underage drinking in the UAE. Assignment ID: 80053 (Navin Khianey for The National)
Dr. Hassan Elhais, of Al Rowaad Advocates, outlined new legislation to combat cryptocurrency scams. The National photo.
In the UAE, this is the first time punishments have been introduced against the offence, he said.
Article 41 of the law complements the previous article in order to boost online safety and better protect people from being victims of financial crimes.
“It imposes a penalty of five years in prison and/or a fine between Dh250,000 and Dh1 million against those who promote electronic currencies or fake companies to raise money from the public without a licence from competent authorities,” he added.
UAE seeks to protect public from Cryptocurrency scammers
In recent years, cybercriminals have attempted to take advantage of the growing popularity of cryptocurrencies.
Cryptocurrencies are digital currencies that have no physical form like coins or notes, but instead are virtual.
While they cannot be held in your hand, they can be used to purchase goods because they are stored in a digital wallet.
The Abu Dhabi Police warned people earlier this year to beware of fake cryptocurrency schemes promising instant wealth.
The police urged people not to be taken in by advertisements that promise quick and easy money.
Dubai also warned in May about cryptocurrency fraud after false statements linked it to the Dubai Coin.
A Dubai court sentenced two Indian fraudsters, Sydney Lemos and Ryan Fernandez, to more than 500 years in jail each in 2018 for their roles in an elaborate fake currency scheme.
According to investigators, Exential Investments Inc, formerly based in Dubai Media City, conned more than 7,000 investors out of nearly $500 million (Dh1.8 billion).
Cyber law updated in Dubai
Offenders who create fake email accounts or websites impersonating others face jail time, fines between Dh50,000 and Dh200,000, or both.
When the fake accounts are used to defame the people they have impersonated, the penalty increases to two years in prison.
It is continuing to take action against those who circulate fake news by using ‘bots’ to spread misinformation.
According to article 54, using or modifying electronic robots to share, re-share or circulate fake news in the country can lead to a two-year prison sentence or a fine of up to Dh1 million, or both, said Elhais.