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UAE's crypto push seeks to draw in high-net-worth individuals

Visitors stand in front of works by Bybit on display during the 15th edition of Art Dubai at Madinat Jumeirah in the Gulf emirate of Dubai, on March 10, 2022. - Art Dubai, the Middle East's largest annual contemporary art fair, featured for the first time digital works, as the wealthy Gulf emirate seeks to position itself as a crypto-assets hub. - RESTRICTED TO EDITORIAL USE - MANDATORY MENTION OF THE ARTIST UPON PUBLICATION - TO ILLUSTRATE THE EVENT AS SPECIFIED IN THE CAPTION (Photo by Karim SAHIB / AFP)
To:

Al-Monitor Pro Members 

From:

Sebastian Castelier

Business journalist covering Gulf economies

 

Date:

July 25, 2022

Bottom Line: 

The United Arab Emirates’ strategy to lure in digital-era wealth via the crypto ecosystem was brought to light by the recent “flood of requests” by wealthy Russians to liquidate billions of dollars of crypto via UAE-based crypto exchanges and turn it into cash or properties in Dubai. Emirati developer Damac Properties started accepting Bitcoin and Ethereum to buy properties. The UAE banks on its appealing tax-free luxurious lifestyle to convince them to call the country home.

However, money-laundering risks embedded in the cryptocurrency industry put the UAE on a hot seat, especially as the Financial Action Task Force (FATF) "grey-listed" the country in March 2022. Globally, illicit financial flow concerns might be overplayed as “almost all cryptos” record data about every transaction in a public ledger, said Standard Chartered’s head of crypto research Geoffrey Kendrick. “It is pretty straightforward to work out who does what. [...] Bitcoin and Ethereum are actually more transparent than cash,” he told Al-Monitor.