Two directions, one page
Virtual asset disputes arrive from two directions. Either assets have been taken and the client wants them back, or a regulator has opened a file and the client is answering it. The work is different but the first fortnight governs both. Law stated as at 30 October 2026.
Recovery: tracing comes before everything
In recovery matters the determining factor is almost never whether the courts will grant relief. It is whether the tracing was done early enough, and documented well enough, to identify a defendant and an attachable asset before the coins move again.
The sequence that works:
- Preserve the record immediately. Transaction hashes, wallet addresses, platform correspondence, device access logs, and the full chain of instructions. This is evidence, and it degrades.
- Trace on-chain to a point of identity. Coins are pseudonymous until they touch a regulated venue. The practical objective is to follow the flow to an exchange that performs customer due diligence, because that is where a chain of hashes becomes a person.
- Move against the venue, not the wallet. Relief that reaches a cooperative regulated exchange is worth more than relief against an address nobody can serve.
- Choose the forum deliberately. Onshore Dubai Courts, the DIFC Courts and the ADGM Courts each offer different interim relief and different speed, and the right answer depends on where the counterparty and the assets are, not on which forum is more familiar.
- Run the criminal track where it is justified. A misappropriation can support a criminal complaint alongside the civil claim, and in the right case that is the faster route to preservation.
We set the practical mechanics out in more detail in recovering crypto through the Dubai Courts.
Defence: answering a VARA enforcement file
On the other side, the pattern is also consistent. Enforcement interest tends to begin with something procedural — a reporting gap, a marketing complaint, a customer due diligence sample — and widen from there into whether the activity being carried on matches the activity licensed.
What helps, in order:
- Answer the question asked. Expansive responses import new subject matter into the file.
- Produce a clean activity map. Being able to show, quickly, which licensed activity each product falls under is the most useful document a platform can have.
- Separate what is a breach from what is a disagreement about classification. They are answered differently and conflating them weakens both.
- Treat remediation as evidence. Steps taken before the authority asks for them carry weight that steps taken afterwards do not.
Our longer note on this is defending a VARA enforcement action.
The AML layer under both
Customer due diligence and the travel rule sit underneath recovery and defence alike: the same records that prove a platform met its obligations are the records that let a victim trace. A platform with disciplined onboarding files is both easier to defend and more useful to a claimant. See the UAE virtual asset travel rule.
What costs people the asset
- Waiting to be certain. By the time the picture is complete the coins have usually been through a mixer or an unregulated venue.
- Telling the counterparty. A demand letter before a freezing application is an instruction to move.
- Tracing without a forum strategy. Analysis that is not built toward an application in a specific court is an expensive report.
- Assuming a foreign order will be enough. Recognition is a separate exercise with its own timeline, and it is rarely fast enough on its own.
Primary sources
The law and rules this page relies on. Links go to the regulator rather than to a summary, because the rulebooks move faster than commentary on them. Law stated as at 30 October 2026.
- Federal Decree-Law No. 32 of 2025 concerning the Capital Market Authority — in force 1 January 2026; the CMA is the legal successor to the Securities and Commodities Authority, and references to the SCA in legislation are read as references to the CMA. CMA
- Federal Decree-Law No. 33 of 2025 on the Regulation of Capital Markets — in force 1 January 2026. UAE Legislation
- VARA Rulebooks and Licensed Activities — the eight licensed virtual asset activities, the custody segregation rule and the proprietary-trading carve-out. VARA
- VARA Exchange Services Rulebook v2.1 — effective 31 March 2026, introducing a regime for exchange-traded derivatives. VARA rulebooks
- CBUAE Payment Token Services Regulation (Circular No. 2/2024) — issuance, conversion, custody and transfer of payment tokens; Dirham Payment Token issuance is licensable. CBUAE
- DFSA Crypto Token regime — DIFC. DFSA
- ADGM FSRA virtual asset framework — Abu Dhabi. ADGM
Frequently asked questions
How quickly do I need to act?
Days, not weeks. Virtual assets move at the speed of a transaction, and the practical window is the period before the assets reach an unregulated venue or a mixing service. The single most useful thing a client can do on day one is preserve every hash, address and item of correspondence and take advice before contacting the counterparty.
Can the Dubai Courts freeze crypto held abroad?
The realistic strategy is usually to obtain relief that reaches a regulated exchange holding the assets or holding an account in the name of the person who controls them, and to pair it with recognition proceedings where the venue sits in another jurisdiction. Relief against an address alone is of limited practical use because there is nobody to serve and nothing to enforce against.
Should I report it to the police as well as suing?
Often yes. A criminal complaint and a civil claim are not alternatives, and in misappropriation cases the criminal track can produce preservation faster. Whether it helps depends on the facts, and it should be a deliberate decision taken with the civil strategy rather than a reflex.