The authorities in the United Arab Emirates (UAE) have had their eyes on crypto scams for quite some time. Recently, the UAE announced strict punishments for crypto scammers, who continue to target investors operating out of the country. The punishments will be enforced from January 2, 2022. If the UAE finds an individual guilty of a crypto scam, the individual may be jailed for a period of up to 5 years. The scammer may also be slapped with a AED 1 million penalty on top of the jail sentence.
Most crypto scams have the same motive – to know passcodes and/or private keys for tricking investors to send cryptocurrency payments to digital wallets that have been compromised. Even citizens who merely promote the use of unrecognized cryptocurrencies will be punished and penalized, according to a statement released by Al Rowaad Advocates’ Dr. Hassan Elhais. Previously, UAE laws had prohibited the promotion of cryptocurrencies. However, there were no penalties involved.
Through 2021, various high-profile cryptocurrency scams have been reported. For starters, there was the $613 million heist from Poly Network, a token-swapping platform. Even though the hackers returned around $260 million within 24 hours of the heist, it showed that loopholes exist within crypto platforms, which may jeopardize investors’ money.
As the values of cryptocurrencies and their adoption continue to rise, experts have warned that more scams are likely in the future. While crypto and blockchain platforms and service providers are enhancing security features to minimize risks of heists, strict legal punishments are also being brought in to protect investors.