UAE’s new financial law pulls DeFi and Web3 into regulatory scope

Overview

The United Arab Emirates has enacted Federal Decree Law No. 6, which extends the regulatory oversight of the UAE central bank to encompass decentralized finance (DeFi) and Web3 technologies. This new law marks a significant shift in the regulatory landscape, ending the previously held “just code” defense for developers and imposing substantial penalties for non-compliance.

What Happened

The introduction of Federal Decree Law No. 6 signifies a proactive approach by the UAE to regulate the rapidly evolving sectors of DeFi and Web3. By expanding the central bank’s authority, the law seeks to address the unique challenges and risks associated with these technologies. The end of the “just code” defense indicates that developers and operators can no longer rely on the argument that their software is merely a tool without accountability.

In addition to the regulatory framework, the law establishes penalties for violations, which can reach up to $272 million. This substantial potential financial liability underscores the seriousness with which the UAE is approaching the regulation of new financial technologies.

Impact on the crypto market

• The expansion of regulatory authority may lead to increased compliance costs for DeFi and Web3 projects operating in the UAE.
• Developers may need to reassess their legal strategies and operational frameworks to align with the new regulations.
• The imposition of significant penalties could deter non-compliance, leading to a more structured and potentially safer environment for investors.
• The law may attract institutional interest in the UAE’s crypto market due to clearer regulatory guidelines.
• The end of the “just code” defense could lead to more accountability within the DeFi space, influencing how projects are developed and maintained.

Updated: 11/25/2025, 11:22:49 AM