Welcome back to Lawgical with Ludmila, where we untangle the legal knots so that you don’t have to. I’m Ludmila Yamalova, a U.S.-qualified lawyer based in Dubai.
In each episode, we break down complex laws into clear, practical insights that you can actually use. In today’s episode, we’ll be covering crypto scams in the UAE — and what you can realistically do about them.
Recently, we have seen a surge of clients who have become victims of crypto fraud — classical investment scams dressed up with modern tools.
At a high level, they can be described as:
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Signal, WhatsApp, or Telegram trading groups touting guaranteed daily returns.
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Fake exchanges or invite-only platforms that allow small early withdrawals before locking accounts and demanding additional fees.
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Romance or mentorship-style approaches where “relationships” turn into crypto advice, with funds routed through multiple wallets.
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Impersonation of licensed firms or regulators — often misusing the UAE’s strong regulatory brands like ESCA, VARA, and DFSA to appear legitimate.
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Remote-access malware and fake consumer protection sites that hijack devices and banking apps — something the Dubai Police has repeatedly warned about.
Recent Client Cases
What triggered this episode is the wave of clients who have come to us with these exact types of crypto scams.
For example, one client — let’s call him Marat — joined a WhatsApp group discussing market trends and a “new coin” traded on an invite-only platform. The invitation came from someone named Claudia Becker.
Early trades paid off, building confidence. But while traveling, one order “failed” due to “unusual IP activity.” Support then claimed the account was locked and demanded an additional USD 300,000 to unlock it.
In total, the client lost around USD 1.1 million in USDT, transferred from a Binance wallet to the fraudulent platform. The alleged names — Claudia Becker and Professor Adrian Bauer — could not be verified and were almost certainly fabricated.
Another case involved a German client who met a so-called crypto boss at a gym in Qatar. This person claimed to run a successful crypto platform. The client, an experienced businessman, even requested a written contract — but the agreement turned out vague and unenforceable.
After some successful small transactions and early withdrawals, larger transfers began — and communication went dark soon after.
Why These Scams Work
From a legal standpoint, several recurring issues appear in these cases:
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Lack of Documentation:
Most scams involve no formal contracts, no ID copies, and no verifiable documents — just online names like Professor Adrian Bauer or Claudia Becker. -
Untraceable Payment Trails:
Unlike traditional banking, where payments can be tracked via SWIFT or IBAN, crypto transactions show only wallet addresses and blockchain hashes — not real identities. -
Anonymous Communication Channels:
Most interactions happen through WhatsApp, Telegram, or Signal — using anonymous accounts or numbers registered outside the UAE. It’s often impossible to prove jurisdiction. -
Jurisdictional Challenges:
Many perpetrators operate from abroad. Even if a UAE-based victim files a complaint, enforcing a judgment against someone in Portugal or Spain, for example, becomes almost impossible.
Legal Framework in the UAE
Crypto activity in the UAE is legal only when licensed by the correct authority. Anything else is a red flag.
Depending on the location and business type, authorization must come from:
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SCA (Securities and Commodities Authority) – federal oversight.
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VARA (Virtual Assets Regulatory Authority) – regulates activities in Dubai.
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DFSA (Dubai Financial Services Authority) – governs activities within the DIFC.
Cabinet Resolution No. 111 of 2022 regulates virtual assets nationwide, prohibiting any unlicensed crypto activity.
In Dubai, Law No. 4 of 2022 and the VARA Rulebooks (2023) outline licensing requirements, AML/CFT obligations, and activity permissions.
Within the DIFC, the DFSA enforces its own Crypto Token Regime, while the DIFC Digital Assets Law (2024) formally recognizes digital assets as property — a crucial legal development for recovery and litigation.
In short: if an individual or entity offers crypto-related services without these licenses, they’re operating illegally, and you should stay away.
If You’ve Been Scammed: Immediate Steps
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Document Everything:
Save all transaction details, wallet addresses, hashes, chat logs, screenshots, and URLs. Evidence is everything. -
Trace the Funds:
Use Blockchain Explorers — public tools like Etherscan or Tronscan — to track transactions between wallets. They show what happened, but not who did it. -
Use Blockchain Forensics:
Firms like Chainalysis, Elliptic, and TRM Labs connect on-chain transactions with off-chain identities. Their forensic reports are often required by regulators or courts and can support freezing or disclosure orders. -
File a Complaint:
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Dubai Police E-Crime Portal: For local cases with a UAE connection.
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Regulators: If a scammer impersonates a VARA, DFSA, or ESCA license, report it directly to the relevant authority.
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Amen.ae Platform: A new UAE government service allowing the public to report misleading, unsafe, or false advertising content online — including fraudulent investment claims or fake licensing.
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Real-World Example: Misleading Crypto Advertising
We recently encountered a client who paid AED 20,000 to a crypto influencer promising a 10-year Golden Visa through his YouTube channel. The claim was false and misrepresented UAE government policies.
This is precisely the kind of case that can be reported under the Amen.ae platform as misleading content. Authorities can investigate and potentially freeze such accounts or channels.
Act Fast
Speed is crucial. The sooner you report, the higher your chances of freezing assets or tracing funds.
Do not delay out of embarrassment, and never send more money to “recover” your lost investment.
Legal Remedies
Criminal complaints may lead to prosecution but rarely recover funds. To reclaim money, victims must file a civil case.
The DIFC Digital Economy Court is specifically designed to handle such disputes, with technical expertise in digital assets and international enforcement reach. It recognizes crypto as property and offers remedies such as:
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Worldwide freezing orders
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Disclosure orders against intermediaries
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Injunctions to prevent dissipation of assets
One notable case, Huobi v. Tabarak (2024), confirmed that digital assets are property and that control through private keys determines ownership — setting a landmark precedent for crypto recovery.
Another case, Tectorics Ltd. v. Aria Commodities DMCC (2025), resulted in a worldwide freezing order over USD 456 million in misappropriated stablecoin reserves — showing that DIFC courts can issue global asset freezes.
Practical Realities
If stolen funds sit in a cold wallet (offline storage), recovery is nearly impossible.
If assets pass through a centralized exchange like Binance or Kraken, move quickly — within hours or days — to request freezes or disclosure.
Always verify the UAE nexus of anyone you’re dealing with. Without it, local enforcement becomes futile.
Key Takeaways
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Crypto is legally recognized as property in the DIFC, enabling proprietary relief.
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Control is key: Courts assess who holds the private keys, not just who’s named as the owner.
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Documentation wins: Keep clear contracts, KYC records, and transaction proofs.
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Licensing matters: Always verify entities against VARA, DFSA, or ESCA registries.
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Speed and evidence determine recovery success.
The UAE’s evolving legal framework — through VARA, ESCA, DFSA, and the DIFC — offers growing protection against crypto scams, but effective enforcement depends on timely action, solid documentation, and the right legal forum.
That’s all for this episode of Lawgical with Ludmila. If you found it useful, visit lylawyers.com for more insights. We’re also available on Apple Podcasts and Spotify, and you can watch our video episodes on YouTube.
Until next time — stay informed, stay safe, and keep things Lawgical.
