Fact Check: Did the UAE Really Ban Bitcoin?

Understanding the Confusion Surrounding New UAE Financial Law

A claim circulating widely across X and LinkedIn today alleges that the United Arab Emirates (UAE) has “banned Bitcoin,” criminalized self-custody wallets, and imposed severe fines and jail time for anyone using unlicensed crypto tools. This claim has since proven to be misleading and based on a misinterpretation of the country’s new financial regulation.

The statement, made by Mikko Ohtamaa, Co-Founder of a trading protocol, triggered immediate confusion and debate, especially among Dubai’s large crypto community.

The Origin of the Misinformation

The controversy began when an X user, Mikko Ohtamaa, published a post stating: “UNITED ARAB EMIRATES BANS BITCOIN. I have bad news for all crypto habibis in Dubai, it’s real.”

He claimed the New Central Bank of the UAE Law makes it a crime to offer “tools,” including “self-custodial Bitcoin wallets, blockchain explorers, and coin market cap sites,” without a licence.

He also suggested that only Bitcoin approved by the Central Bank would be allowed, writing: “No wallet. No Bitcoin. No problem. Even if no indirectly. Only Bitcoin you are allowed to own is one permitted by Central Bank of UAE.”

He pointed to Article 170, which introduces imprisonment and fines of up to USD 136 million for violating the law. He linked the development to what he described as the UAE’s repressive record, noting, “If you have ever visited the country, you know that even WhatsApp calls do not work.”

The post quickly spread across social media and professional networks, prompting widespread concern among residents and investors.

Deconstructing the Official UAE Financial Law

The law in question is real, officially known as Federal-Decree Law No. 6 of 2025, or the new CBUAE Law. It took effect on September 16, 2025. This comprehensive legislation consolidates various major financial regulations under a single framework, encompassing banks, insurance companies, and payment service providers.

The law introduces new licensing requirements, enhances the regulator's oversight capabilities, and provides stronger enforcement tools for instances of non-compliance. However, it is crucial to note that the law does not ban Bitcoin for individual users.

Key Provisions of the New Law:

1. Targeting Unlicensed Financial Activities: Articles 60 and 170 clearly stipulate that conducting regulated financial activities without a license is a criminal offense. Penalties range from AED 50,000 to AED 500 million, with the potential for imprisonment.

2. Inclusion of Technology Providers: Article 62 now mandates that any entity involved in financial work, or facilitating it, through any form of technology will be treated as a regulated financial service. This includes companies providing the technology or infrastructure for payments, trading, custody, or investment in virtual assets.

3. Virtual Asset Payment and Custodial Services: The law brings virtual asset financial activities under the Central Bank’s purview if they involve payments, remittances, or the holding of customer assets.

4. No Prohibition on Bitcoin Ownership: The law does not criminalize the ownership of Bitcoin, the use of personal hardware wallets, running a node, or browsing a blockchain explorer. It explicitly does not state that self-custody wallets are illegal for personal use.

5. Free Zones Under Federal Framework: Companies operating within free zones like DIFC or ADGM are still subject to the federal regulations if their services target UAE retail customers.

The primary impact of the law is to broaden licensing requirements for businesses offering crypto-related financial services, even those that may identify themselves as solely technology providers.

Community Reactions and Clarifications

As the sensational claim gained traction, numerous professionals based in the UAE responded to correct the misinformation.

A Dubai resident commented on LinkedIn: “When I read ‘UNITED ARAB EMIRATES BANS BITCOIN’, for a moment I thought how is it possible I missed something like that – since I live here lol – ofc, it’s not the case.”

Another user summarized the situation accurately: “The law is real, but ‘Bitcoin ban’ is an exaggeration – it’s actually ‘regulation of unlicensed crypto financial services.’”

A widely shared comment provided further clarity: “No, the UAE did not ban Bitcoin. It didn’t even ban tools in any way or form. You can go and check the actual law.”

A detailed breakdown offered this perspective: “The one-paragraph version is that the UAE didn’t ban Bitcoin, didn‘t ban self-custody wallets, didn‘t outlaw things like blockchain explorers or price-tracking sites. What the law mentions is very simple: if you’re running an actual financial service (payments, exchange, custody, remittances, or anything that handles money for customers) you need a license, even if you’re using crypto rails or Web3 tech to do it.”

The consensus among industry voices is that the law is designed to regulate unlicensed service providers, not to penalize everyday users.

Addressing the Inaccuracies in the Claim

The assertion that the UAE has “banned Bitcoin” is fundamentally misleading. The new law is directed at businesses, not individuals. The substantial fines are applicable only to companies offering regulated financial services without the necessary approval. It does not prohibit wallets, blockchain explorers, or personal Bitcoin ownership.

There is no stipulation requiring individuals to use only “Central Bank-approved Bitcoin,” as was claimed.

While the language in the law is broad, and some interpretation challenges may arise, particularly concerning the term “facilitation,” there is nothing within the text that supports a complete ban on Bitcoin usage or personal tools.

Conclusion: Regulation, Not Prohibition

The UAE has definitively NOT banned Bitcoin.

The country has enacted a significant update to its financial regulations, granting regulators increased control over virtual asset service providers and establishing stringent penalties for those operating such services without a license. This regulatory overhaul encompasses exchanges, custodians, payment platforms, DeFi services, and even the technology providers that support these financial activities.

However, these measures do not target regular users. Individuals can continue to own Bitcoin, utilize their personal wallets, access blockchain explorers, and employ similar tools without any legal repercussions.

In essence, this development represents the government's commitment to tightening regulation within the financial sector, rather than an outright ban on Bitcoin.