In a region traditionally cautious in its embrace of digital assets, a recent judgment rendered by the Dubai Court has provided rare and, indeed, unprecedented clarity on the legal treatment of cryptocurrencies in commercial disputes.
Amidst the cryptocurrency boom, where virtual coins have rapidly transcended speculative instruments to become functional mediums of exchange, uncertainty has long lingered over how judicial authorities would respond when these volatile assets became the subject of litigation and judicial enforcement.
The question has always been as practical as it is novel: “If I purchase a piece of art in March for one bitcoin, then valued at around USD 80,000, and sue for a refund in May when its value has risen to USD 95,000, how would a Court quantify my entitlement when rendering its verdict in October (when the value had become USD 110,000)? Would it order the defendant to return one bitcoin? Or its equivalent in hard cash (i.e. fiat currency)? And if in cash, would that be based on the value of cryptocurrency at:
- the time of purchase — say March (USD 80,000);
- the time the refund became due — say May (USD 95,000); OR
- at the time of enforcing the judgment — say, October (USD 110,000)“
The Crypto Investment Went Wrong
Such was the central issue before the Dubai Court in a matter recently litigated by our financial litigation experts, concerning a cryptocurrency investment agreement concluded, perhaps fittingly, over WhatsApp.
The Defendant had induced our client to invest 29 Bitcoins and 102 Ethereum into a purported scheme offering a 2% fixed return, with the principal sum “guaranteed”. Profits exceeding that threshold were to be retained by the Defendant as consideration for their services. Critically, the agreement afforded our client the right to redeem the investment at will; an option he duly exercised.
The Defendant, however, defaulted.
The Market Was Going Up, So We Asked for Our Crypto Back
By the time proceedings commenced in March 2024, the portfolio’s value had hovered around AED 8.2 million. By the time the court-appointed expert had completed their analysis, the same portfolio was worth in excess of AED 11 million, a sharp illustration of crypto-volatility and a compelling rationale for the strategy we pursued, which was to anchor our pleadings on the doctrine of specific performance.
Our client, we argued, was entitled not merely to damages but to the precise return of his 29 Bitcoins and 102 Ethereum.
Crypto, we contended, is not merely a fluctuating store of value, but rather an asset with distinct characteristics that must be restored in specie (i.e. in its current form).
Contingency Argument – We Asked for the Cash Market Value Equivalent, But at the Time of Enforcement
As a contingency plan, and given the Dubai Courts had never awarded a Claimant crypto in hard currency in the past, we sought in the alternative monetary compensation equivalent to the value of the 29 Bitcoins and 102 Ethereum, while arguing that such value should be at the time of enforcement, rather than the date of filing of our lawsuit or the even the date of the judgment – an argument premised on foreseeable asset appreciation.
The Dubai Court Groundbreakingly Said you can Have Either of Them
In May 2025, the Dubai Court issued a landmark ruling.
It terminated the investment agreement and ordered the Defendant to refund “precisely 29 Bitcoins and 102 Ethereum” and, in the event of non-compliance, “to pay the Claimant the equivalent market value in dirhams as of the enforcement date”.
What this Verdict Means for UAE Crypto Litigation?
The effects of this ruling are four-fold.
Firstly, it constitutes judicial recognition of cryptocurrencies as legitimate, retrievable assets.
Secondly, and more significantly, it ensures that the judgment creditor is insulated from the inherent volatility of digital assets by anchoring monetary substitution to the most commercially logical benchmark: the enforcement date.
Thirdly, the verdict permits the judgment creditor to pursue forcible retention of the actual cryptocurrencies (i.e. in their crypto form), which thereby opens up the possibility of the UAE enforcement courts enforcing against the judgment debtor’s virtual wallet managers (e.g. Binance) and/or overseeing and ensuring that the judgment creditor has the relevant cryptocurrencies remitted back to their virtual wallet.
Finally, the Court foresaw the difficulty-level in tracing these easily transferrable and concealable currencies and so it permitted the judgment creditor to recover their equivalent market cash value as of the date of enforcement.
This is, to our knowledge, the first ruling of its kind in the UAE, and a crucial signal to crypto investors, crypto traders and industry experts alike that, when structured and argued properly, crypto-based claims are not only justiciable but legally retrievable in their original digital form.
Seek Legal Counsel
For expert guidance on crypto litigation and enforcement, consult Ali Dakhlallah, Head of Banking and Financial Disputes, along with Amjad Ramadan and Omar Kawis, Paralegals. Our team is committed to delivering precise and effective legal solutions tailored to your needs.
