Prosecutors issue new warning over cryptocurrency scams

Tough new laws were announced last year to tackle the promotion of unauthorised currency schemes

Social media platforms are flooded with adverts encouraging people to invest in cryptocurrency schemes, with promises of high returns despite high volatility. Reuters

Fraudsters promoting cryptocurrency scams online face prison and fines of up to Dh500,000, prosecutors have warned.

They have reminded people of the tough penalties announced last year as part of a series of legal reforms.

The legislation broadened the country’s cyber crime laws to cover the advertisement of rogue cryptocurrency schemes, which are not recognised by UAE authorities.

Posting misleading adverts or inaccurate data online or encouraging dealing in a virtual or digital currency not recognised in the UAE could led to a fine of between Dh20,000 and Dh500,000, according to a video released by the Public Prosecution on social media.

Offenders can also be imprisoned for up to five years. Previous laws banned promoting cryptocurrencies but did not penalise it.

“The Public Prosecution noted that, as per article 48 of the Federal Decree-Law No 34 of 2021 on Combatting Rumours and Cybercrimes, imprisonment and a fine of not less than Dh20,000 and not more than Dh500,000, or one of the two, shall be the punishment of any person who, through information networks, information technology solutions or online platforms, commits any of the following: promoting goods or services through misleading advertisement or using false data,” said a statement released by state news agency Wam.

“[Or] advertising, promoting, brokering, or dealing in any form, or encouraging the dealing in a virtual or digital currency, a stored value unit, or any unit of payment that is not officially recognised in the UAE or without obtaining a license from the competent authority.”

Authorities take action over crypto crimes

Cyber criminals have sought to exploit the growing popularity of cryptocurrencies around the world.

Cryptocurrencies are a form of digital money, which do not have a physical form such as coins or notes.

They can be stored in a digital wallet and, while they cannot be held in the hand, they have an allotted value to be used to purchase goods.

Abu Dhabi Police have, in the past, warned people to beware of fake cryptocurrency schemes promising instant wealth.

In 2018, a Dubai court sentenced two Indians, Sydney Lemos and Ryan Fernandez, to more than 500 years in jail each for their role in an elaborate fake currency scheme.

Investigators believe more than 7,000 investors from around the globe were conned out of nearly $500 million (Dh1.8 billion) in the scam by Exential Investments Inc, once based in Dubai Media City.