Dubai’s DIFC has passed a comprehensive digital asset law, a new security law

The Dubai International Financial Center (DIFC), a special economic zone with over 5,000 residents, has announced the adoption of a new Digital Assets and Securities Act and amendments to existing laws. The Center has its own legal system based on English law.

Legislative developments “want to continue the rapid development of international trade and financial markets […] and to provide legal certainty to investors and users in digital assets,” according to the statement. Jacques Visser, Chief Legal Officer of the DIFC Authority, said:

“We consider this bill to be the first legislative act to outline the legal properties of digital assets under property law.”

The Digital Assets Act contains seven pages of text and appendices. Legislation to update at least six previous laws for digital assets has been passed but was not available online at the time of writing. The DIFC noted in its statement that changes to the Obligation Act have made electronic records on a functional par with paper records.

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The much longer Securities Act 2024 replaces the 2005 Act and its 2019 amendment to include financial securities regulations in its text. The new law is modeled on the United Nations Commission on International Trade Law's Model Law on Fair Trade and is in line with international best practices, DFC said.

DIFC in 2011 Updated its cryptocurrency rules in 2022. In 2023, it began supporting licenses for artificial intelligence and Web3 companies. DIFC has reported a net profit of USD 1 million in 2023, a 45% increase compared to the previous year. In addition, new registrations increased by 34 percent that year. This includes the increased presence of hedge funds among the new arrivals, as well as businesses from Europe and the United States.

Although the new digital assets law is claimed to be the first of its kind, it is not the first jurisdiction to address the issue of crypto as an asset. Last year, courts in China, Singapore and Hong Kong ruled against digital assets as property.

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