How do legal consultants in Dubai see cryptocurrency?

Financial consultants, bankers and investors usually fail to understand the true concept behind investment in cryptocurrency, and yet we cannot blame them for unsolicited information available through varied platforms. Thus, Corporate Lawyers of Dubai will walk you through the whole path of cryptocurrency from its emergence until now.

The term Bitcoin, Cryptocurrency and blockchain were peculiar for the
world until Satoshi Nakamoto an unrecognized inventor of Bitcoin
announced in late 2008 about Electronic Cash System. The concept flooded
in world's market like rapid fire and investors around the globe built a
crypt currency market for buying and selling. UAE was also unknown and
unfamiliar to this concept until the tides of elevated profit hit the
market as compared to the current picture where world's first
cryptocurrency deep "cold storage" entities are established and
functioning in UAE.

The Definition

It is an innovation and a virtual currency that uses cryptography, a
procedure to convert legitimate information into an unbreakable code in
order to track buyers and sellers. The need for such secure
communication arose and evolved in the digital era with the aid of a
secure online platform. This currency is operated by way of blockchain
technology in contrast with fiat currency where one authority such as
central bank regulates the currency. Cryptocurrency seeks their
validation from a decentralized system wherein an investor participating
in the process can seek verification. Particularly, Nakamoto benefitted
the process of blockchain technology and created the infamous Bitcoin.

Laws of UAE regulating Cryptocurrency

FSRA-ADGM (Financial Services Regulatory Authority of Abu Dhabi
Global Market) was the first in line to issues guidelines and
regulations in relation to activities of buying and selling
Cryptocurrency. The guidelines were regarding the regulation of Initial
Coin Offerings (ICO) and virtual currencies wherein, the public at large
can purchase and sell Cryptocurrency. FSRA-ADGM will determine the
specific commodity on the case to case basis. The objective of ADGM
regulations if to increase transparency and to restrict money-laundering
activities and to combat financial terrorism.

Inspired by ADGM regulations, DMCC (Dubai Multi Commodity Authority)
has provided an opportunity for investors to incorporate a business of
trading in Cryptocurrency. However, companies would only be allowed to
trade on their own behalf. Accordingly, such companies can establish the
world's first
Cryptocurrency deep "cold storage" cellar.

In an offer to become a pioneer in blockchain innovation, the UAE has
propelled the UAE Blockchain Strategy 2021, as per which half of the
government exchanges will be directed utilizing blockchain innovation by
2021. To consolidate its vision, rules and regulations on the
utilization of crypto resources, including cryptographic forms of money,
have recently been issued.

Prior to the issuance of ADGM regulations, the Central Bank of UAE in
2017 promulgates a regulatory framework regarding the Electronic
Payment System entailing all virtual currencies and transactions being
restricted, setting a high alarm in UAE market. However, post receiving
an unsatisfactory review, the governor of Central Bank clarified that
the regulations would not be applicable to Cryptocurrency. In spite of
this confirmation, UAE still awaits for legalized regulations which one
may resort to in order to understand the validation of cryptocurrency or
to seek a claim against frauds in virtual currency.

Crypto Fraud and Future

The dubious behaviour and presence of Cryptocurrency in the market
make it treacherous for investors as it can turn out to be Ponzi scheme
to steal money. The basic ideology behind Cryptographic money makes it
arduous to prevent theft as any crypto asset is stolen cannot be traced
and returned to the original investor. From past a decade, we have come
across numerous hacks and scams in a crypto world wherein; Coin Check
was the world's biggest crypto theft.
Cryptocurrency is a bubble or a market; we are yet to confirm that
stand. Nonetheless, it has offered the opportunity to billions of users'
entrance to the financial market who otherwise did not even had a bank
account as they fail to meet the relevant criteria to open a bank
account. The current position of Cryptocurrency in UAE is grey, and the
future as of now is colourless. Numerous nations have initiated to issue
guidelines to control the buying and selling of Cryptocurrency and to
prevent the unauthorized usage and avoid financial frauds. 

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