UAE's Bold Move to Regulate DeFi and Web3

The United Arab Emirates has taken a significant step towards regulating decentralized finance (DeFi) and Web3 technologies with its new financial law.

Federal Decree Law No. 6 of 2025

This law is set to bring a major change in how these industries operate within the country.

Key Targets of the Law

• Protocols
• DeFi platforms
• Infrastructure providers

These entities will now need to comply with regulations if they offer services like:

• Payments
• Exchanges
• Lending
• Custody
• Investments

Game-Changer for the Crypto Industry

• DeFi projects can no longer avoid regulations by claiming they are just code.
• Decentralization will not exempt them from compliance.

Impact on Cryptocurrency Wallets

• Wallet providers are affected.
• Self-custody is not banned.
• Individuals can still use their own wallets.
• Companies enabling financial services will face expanded regulatory oversight.

Penalties and Deadline

• Law is already in effect.
• Penalties include fines of up to 1 billion dirhams and potential criminal sanctions.
• Companies must align their systems with the new regulations by September 2026.