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. This law, known as Federal Decree Law No. 6 of 2025, is set to bring a major change in how these industries operate within the country. The law targets various aspects of the crypto world, including protocols, DeFi platforms, and infrastructure providers. These entities will now need to comply with regulations if they offer services like payments, exchanges, lending, custody, or investments. This new law is a game-changer for the crypto industry in the UAE. It means that DeFi projects can no longer avoid regulations by claiming they are just code. The argument of decentralization will not exempt them from compliance. The law also affects cryptocurrency wallet providers. However, it does not ban self-custody or restrict individuals from using their own wallets. Instead, it expands the regulatory perimeter for companies that enable certain financial services. The law is already in effect, and penalties for non-compliance are severe, including fines of up to 1 billion dirhams and potential criminal sanctions. Companies operating in the UAE should start aligning their systems with the new regulations before the September 2026 deadline.