Cryptocurrency services companies operating in Dubai (UAE) are seeing increased crypto investment redemption orders to the tune of billions of dollars from Russian high net-worth individuals (HNIs). These high-value cryptocurrency redemptions are coming amid sanctions imposed by the US and Europe on Russia due to the Russia-Ukraine war.
What Has Happened?
According to an exclusive report by Reuters, Russian billionaires who used to keep their financial assets with Swiss banks are now moving them away from there to Dubai (UAE). This sudden movement of their wealth from Switzerland to Dubai comes amid fears of the Swiss government freezing their assets due to sanctions imposed by Europe and the US. A real estate broker who spoke on the condition of anonymity said, "We've been seeing a lot of Russians and even Belarusians coming to Dubai and bringing whatever they can bring, even in crypto," reported Reuters.
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A crypto firm that shared information on the condition of anonymity said that the company has received many queries in the past two weeks from Swiss brokers regarding the sale of their client’s cryptocurrency assets. They also added that none of the requests were less than $2 billion, the report stated.
In an emailed interview with Reuters, the UAE's economic affairs secretariat (SECO) said in an emailed interview that "crypto-assets are subject to the same sanctions and measures Switzerland has imposed on normal Russian assets and individuals, so if a person is sanctioned, their crypto assets must also be frozen in Switzerland."
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What is Dubai’s stance regarding cryptocurrency?
On March 9, Dubai adopted its first cryptocurrency law. Under this new law, the Dubai Virtual Assets Regulatory Authority (VARA), which is an independent authority under the Dubai World Trade Centre Authority, will oversee the regulation, governance, and licencing of cryptocurrencies, NFTs, and other virtual assets.
The new law also mandates that no company may offer cryptocurrency and its related services without seeking permission from VARA. Sheikh Mohammed bin Rashid Al Maktoum, the prime minister of the United Arab Emirates (UAE), said in a post on Twitter: "We approved the virtual assets law and established the Dubai Virtual Assets Regulatory Authority." a step that establishes the UAE’s position in this sector. The Authority will cooperate with all related entities to ensure maximum transparency and security for investors. "
