The United Arab Emirates (UAE) is actively advancing in the fight against financial crimes — from money laundering to cyber fraud involving crypto assets. New legislative and regulatory measures, international agreements, and enhanced oversight all indicate the country's desire to play by strict, global rules. Let's analyze what exactly the authorities are doing, how progress is being manifested, and what risks remain.
What has been done: key initiatives
Strengthening the regulatory framework
In 2024, the UAE approved the National Strategy for AML/CFT (anti-money laundering and combating the financing of terrorism) for the period 2024-2027.
Legislation updated: new decree-laws introduced, AML/CFT committees received broader powers.
Creation and expansion of supervisory and coordination institutions
The Executive Office for AML/CFT was established, responsible for implementing the national strategy.
The Supreme Committee and the general secretariat of this committee have been introduced.
Improving transparency and accountability
A unified register of ultimate beneficial owners (UBO) for companies has been created, including those in free zones.
The number of reports on suspicious transactions has increased, and the work of the Financial Intelligence Unit (FIU) has improved.
Strengthening supervision in the virtual assets sector (crypto, DeFi, etc.)
Regulators such as SCA (Securities and Commodities Authority), VARA (Virtual Asset Regulatory Authority), and others coordinate the licensing of virtual asset service providers (VASP), verify KYC compliance, monitor transactions, and conduct blockchain forensics.
ADGM (Abu Dhabi Global Market) signed an agreement with the UAE Ministry of Interior for information exchange and joint investigations on digital assets.
International cooperation
The UAE actively signs agreements with foreign jurisdictions for information exchange and joint investigations.
Joint initiatives with China in combating fraud related to cryptocurrencies, as well as against telecom fraud, online games, etc.$BTC
Removal from the FATF 'grey list'
The UAE was included in the 'grey list' of the Financial Action Task Force (FATF) due to deficiencies in the approach to AML/CFT, but was removed from it in February 2024. This reflects the perception of progress by the international community.
Analytics: what this means in practice
Positive effects
Increased trust from international partners and investors
Facts: removal from the 'grey list', agreements on information exchange, transparent laws. All of this reduces risk for companies operating globally or through various existing jurisdictions.Raising standards in the crypto industry and financial sector
The UAE strives to be 'crypto-friendly', but regulation is tightening — licenses, KYC, monitoring, blockchain forensics. This means that crypto companies wishing to operate here must be well-prepared and comply with the rules.Reduction of channels for abuse of digital assets
With the growth of regulation, reporting obligations, and connections to international law — it is becoming more difficult to use virtual assets for money laundering, financing terrorism, and sanctions.Competitive advantage for the UAE amid instability in other jurisdictions
While some countries are still seeking a balance between fostering crypto innovations and security, the UAE is already moving in this direction: they declare that they are strictly pursuing abuses while remaining attractive for business.
Risks, challenges, and what else needs improvement
Practical implementation of laws and supervision
Legislation may be good, but the key is in court decisions, investigations, and penalties. Questions remain: how quickly law enforcement responds, are there sufficient resources and expertise.Threats of regulatory avoidance
Crypto allows for anonymity, decentralization, and cross-border transactions — there will always be ways to circumvent (through offshore zones, free zones, unlicensed services). This requires constant oversight, updating of rules and technologies.Balance between fostering innovation and security
Excessively cumbersome regulation may hinder the growth of innovation and deter startups. Flexibility is needed to ensure the UAE remains a magnet for technological projects, especially in the fields of Web3, DeFi, and blockchain.External pressure and sanctions
Due to geopolitical events (war, sanctions), the flow of capital and individuals linked to sanctions may create threats to legitimate business. The UAE must be proactive in sanction nodes, collaborating with international partners to avoid becoming a place to circumvent sanctions.Transparency and control of patrons
Often companies and individuals close to power or with a wide network of connections have the ability to influence how laws are applied. Society and international partners will be attentive to how rules are adhered to by powerful players.
My perspective: where the UAE is headed and what is important to monitor next.
The UAE is moving in the right direction: they recognize that the status of a financial center and crypto hub requires compliance with high standards. What they have already achieved — removal from the 'grey list', building institutions — is not just image, but a fundamental element of competitiveness.
What to pay attention to in the near future:
Effectiveness of judicial cases against crypto crimes: not just law, but judicial practice.
Speed and transparency in providing information on beneficial owners, interaction with international bodies (e.g., when violations occur in cross-border flows).
How oversight and licensing of VASP sectors will evolve, are there real measures (fines, blocks, closures) for violators.
How involved the private sector (exchanges, wallets, decentralized platforms) is in the system, and how their risks are regulated.
How the UAE will respond to new threats: DeFi protocols, blending real and crypto assets, confidential networks and services that are difficult to regulate.
