Civil Law and UAE Cryptocurrency Fraud Civil Claims

1. Introduction

Cryptocurrency fraud civil claims in the UAE arise when a person or entity suffers loss because of fraudulent conduct involving Bitcoin, Ether, stablecoins, tokens, crypto exchanges, wallets, private keys, investment schemes, smart contracts, or other digital assets.

A crypto-fraud claim may seek:

return of the cryptocurrency;

tracing of transferred crypto;

restitution;

monetary damages;

freezing or proprietary injunctions;

disclosure of wallet/exchange information;

preservation of electronic evidence;

declaration of ownership;

recovery of traceable proceeds;

interest and litigation costs.

The UAE position is developing rapidly, particularly through the DIFC Digital Economy Court. The reported Gate Mena/Huobi v Tabarak litigation remains a major UAE authority on cryptocurrency, fraud, property, custody and damages. More recently, Techteryx v Aria Commodities has demonstrated the use of proprietary injunctions, worldwide freezing relief and disclosure orders in a major digital-asset dispute. (DIFC Courts)

A further important development is the new UAE Civil Transactions Law, Federal Decree-Law No. 25 of 2025, effective from 1 June 2026. Article 112 expressly identifies the contract, unilateral act, harmful act/tort, unjust enrichment and law as sources of obligations. Articles 109–111 separately address real and incorporeal rights. (UAE Legislation)

2. Meaning of Cryptocurrency Fraud

Cryptocurrency fraud generally involves obtaining, transferring, controlling or retaining cryptoassets through deception, unauthorised conduct or other wrongful means.

Common examples include:

A. Fake investment schemes

A fraudster promises:

“Invest AED 100,000 in cryptocurrency and receive guaranteed monthly returns.”

The victim transfers USDT or fiat money, but the promised investment does not exist.

B. Fake cryptocurrency platforms

A website or application may appear to be a legitimate exchange but is controlled by fraudsters.

The victim deposits crypto but cannot withdraw it.

C. Private-key theft

The fraudster obtains:

seed phrase;

private key;

authentication code; or

wallet credentials

and transfers the crypto.

D. Social-engineering fraud

The victim is manipulated into voluntarily transferring crypto to a fraudulent wallet.

E. Cryptocurrency impersonation

The fraudster pretends to be:

an exchange;

broker;

investment adviser;

company;

government entity; or

another individual.

F. Stablecoin fraud

A person may misappropriate stablecoins or funds said to support a stablecoin.

The recent Techteryx proceedings demonstrate the potential complexity of such disputes, including claims involving alleged fraud, underlying reserves and multiple financial institutions. (DIFC Courts)

3. Legal Character of a Crypto-Fraud Claim

A single transaction can generate several causes of action.

For example:

A fraudster induces A to transfer 1,000 USDT and immediately transfers the USDT through several wallets to a crypto exchange.

The claimant might potentially rely upon:

Fraudulent conduct

↓

Harmful act / civil liability

↓

Unjust enrichment

↓

Breach of contract, if applicable

↓

Proprietary claim

↓

Tracing

↓

Restitution / damages

The appropriate cause of action depends upon the evidence and applicable law.

4. New UAE Civil Transactions Law

The 2026 Civil Transactions Law is particularly relevant because Article 112 identifies five principal sources of obligations:

contract;

unilateral act;

harmful act;

unjust enrichment; and

law. (UAE Legislation)

This provides a useful framework for analysing cryptocurrency fraud.

Harmful act

A fraudulent transfer may generate civil liability where the statutory requirements for a harmful act are satisfied.

Unjust enrichment

If a person receives crypto without a valid legal basis, restitutionary principles may become relevant.

Contract

Where the fraud occurs through an exchange, brokerage or custodial relationship, contractual obligations may also arise.

Property

Article 109 concerns real rights, while Article 111 recognises incorporeal rights relating to intangible things. Cryptoasset disputes must therefore also be analysed alongside specialised digital-asset legislation and the applicable regulatory regime. (UAE Legislation)

5. Cryptocurrency as Property

One of the most important questions is:

Can cryptocurrency be treated as property for civil recovery purposes?

The DIFC Court of Appeal addressed this directly in Gate Mena DMCC v Tabarak Investment Capital Ltd [2023] DIFC CA 002.

The Court examined the characteristics of Bitcoin and considered whether it could constitute property capable of legal protection. The judgment dealt with the digital nature of cryptoassets, control, private keys and the consequences of fraudulent transfer. (DIFC Courts)

This is important because a claimant can formulate a stronger recovery case where the claim is not simply:

“I lost money.”

but:

“A specific digital asset belonging to me was wrongfully transferred and can be traced.”

That distinction can affect the availability of proprietary remedies.

6. Ownership and Wallet Control

Crypto litigation requires a distinction between:

ownership;

beneficial entitlement;

possession;

wallet control;

private-key control;

custody; and

contractual rights.

For example:

Customer A

owns 100 BTC.

↓

Exchange B

holds the BTC through a wallet.

↓

Exchange B controls the private key.

↓

A hacker obtains the private key.

↓

BTC is transferred to another address.

The fact that the hacker controls the private key does not necessarily establish legal ownership.

Conversely, proving ownership does not necessarily mean that the claimant can technically recover the cryptocurrency.

The Gate/Huobi litigation examined these difficult questions in detail. (DIFC Courts)

7. Main Civil Causes of Action

A. Fraud

The claimant must establish the elements required under the applicable law.

Evidence may include:

false representations;

deceptive communications;

false investment promises;

forged documents;

impersonation;

fraudulent wallet instructions;

concealment;

dishonest diversion of funds.

B. Civil Liability for Harmful Acts

Where fraudulent conduct causes damage, civil liability may arise independently of a contract.

The basic analytical structure is:

Wrongful conduct → Damage → Causation → Compensation.

The claimant must establish the legal requirements applicable under the relevant UAE law and forum.

C. Breach of Contract

If the victim had a relationship with:

an exchange;

custodian;

broker;

wallet provider;

investment platform;

the contract may establish additional duties.

For example:

“The exchange shall safeguard customer assets and process withdrawals only upon authorised instructions.”

An unauthorised transfer may therefore generate a contractual claim.

D. Unjust Enrichment

Suppose:

A fraudster receives 500 ETH but has no valid legal entitlement to retain it.

The claimant may seek restitution where the requirements of unjust enrichment are established.

E. Proprietary Claim

A claimant may argue:

“The cryptocurrency itself belongs to me.”

This differs from a simple damages claim.

A proprietary claim may support remedies directed toward:

the specific cryptocurrency;

traceable proceeds;

assets representing the proceeds.

8. Tracing Cryptocurrency

Tracing is one of the most important elements of crypto-fraud litigation.

A typical transaction may look like:

Victim wallet

→ Fraudster wallet

→ Wallet 2

→ Wallet 3

→ Exchange

→ Bank

→ Fiat proceeds

The claimant therefore needs to establish the transaction chain.

Evidence may include:

blockchain transaction hash;

wallet address;

block number;

transaction timestamp;

amount transferred;

destination address;

subsequent transfers;

exchange records;

KYC information;

bank records.

The blockchain can establish the movement of crypto, but additional evidence may be required to establish who controls a particular address.

9. Exchange Disclosure

A major problem is that the victim may know:

“The stolen crypto went to wallet 0xABC…”

but not:

“Who owns wallet 0xABC?”

An exchange may hold the missing information.

Possible evidence includes:

KYC records;

identity documents;

account information;

deposit records;

withdrawal records;

IP addresses;

transaction histories;

linked bank accounts;

communications.

Consequently, civil proceedings may seek disclosure from an exchange or other intermediary, subject to the applicable procedural and privacy rules.

10. Freezing and Proprietary Injunctions

Crypto can move rapidly.

Therefore, preservation of assets may be critical.

Possible interim remedies include:

1. Freezing injunction

Restrains the defendant from dealing with specified assets.

2. Proprietary injunction

Protects assets alleged to belong to the claimant.

3. Disclosure order

Requires information concerning assets, transactions or recipients.

4. Preservation order

Protects documents and electronic evidence.

5. Worldwide freezing relief

May restrict dealings with assets wherever located, subject to the terms and enforceability of the order.

11. Techteryx v Aria Commodities

Techteryx Ltd v Aria Commodities DMCC & Others [2025] DIFC DEC 001

This is a particularly significant recent UAE authority.

The proceedings involved allegations concerning fraud and assets/reserves associated with a stablecoin structure.

The DIFC Digital Economy Court granted extensive interim protection, including:

a proprietary injunction;

worldwide freezing relief;

disclosure obligations concerning transferred funds and traceable proceeds.

The orders required disclosure concerning the current value, location and ultimate beneficiaries of funds and traceable proceeds. (DIFC Courts)

The proceedings continued through 2026, including applications concerning compliance with the Court's orders. (DIFC Courts)

Principle

Crypto-fraud litigation can require asset preservation and tracing before the final merits are determined, particularly where there is an alleged risk of dissipation.

12. Gate Mena DMCC v Tabarak Investment Capital

[2023] DIFC CA 002

This is one of the most important UAE crypto cases.

The dispute arose from a transaction involving 300 BTC.

The case required the courts to consider:

Bitcoin as property;

crypto custody;

private keys;

control;

fraud;

responsibility for loss;

contractual obligations;

damages.

The Court of Appeal described the case as involving the problem of determining which of two innocent parties should bear the loss caused by unidentified fraudsters. (DIFC Courts)

Principle

Crypto-fraud litigation cannot simply assume that the person closest to the technical failure is automatically legally responsible. The court must analyse:

Contract → Duty → Conduct → Causation → Loss → Remedy.

13. Gate Mena v Tabarak — 2026 Retrial

The case subsequently returned to the DIFC Digital Economy Court.

Gate Mena DMCC & Huobi Mena FZE v Tabarak Investment Capital Ltd [2024] DIFC DEC 002

The retrial was conducted in February 2026 and judgment was issued on 17 June 2026.

The Court considered, among other issues:

whether BTC should be treated as money/currency for the applicable damages provisions;

USD-denominated damages;

valuation at breach;

valuation at judgment/payment;

mitigation;

causation.

The claimants' claim was ultimately dismissed at the retrial. (DIFC Courts)

Importance

This case demonstrates that establishing that cryptocurrency is property does not automatically establish entitlement to every claimed measure of damages.

Ownership, breach, causation and quantification remain separate questions.

14. Gate Mena v Tabarak — First Instance

[2020] DIFC TCD 001

The first-instance proceedings concerned the same underlying 300-BTC dispute.

The litigation examined:

cryptocurrency trading;

escrow;

custody;

wallet control;

fraud;

transaction procedures;

responsibility for loss.

The judgment was subsequently appealed. (DIFC Courts)

Principle

The contractual and factual role of each participant must be determined before assigning responsibility for a fraudulent crypto transaction.

15. Aegis Resources DMCC v Union Bank of India

[2020] DIFC CFI 004

This case was not a cryptocurrency dispute, but it is highly relevant to digital fraud civil claims.

A fraudster hacked the claimant's email system and sent fraudulent payment instructions to the bank.

The DIFC Court described the central issue as determining whether the bank or customer should bear the loss caused by the fraudster. On the facts of the case, the Court placed the loss on the bank and awarded consequential loss. (DIFC Courts)

The resulting order awarded the claimant damages and interest exceeding USD 101,000. (DIFC Courts)

Principle

Digital fraud requires examination of:

authentication;

security procedures;

authorised instructions;

intermediary obligations;

causation;

contributory negligence;

consequential loss.

These principles can be relevant to crypto exchanges and custodians where fraud involves electronic instructions.

16. AES Middle East Insurance Broker LLC v GSB Capital Ltd

[2023] DIFC CFI 060

This was not a cryptocurrency-fraud claim, but it is relevant to the preservation of digital evidence.

The DIFC Court ordered protection of confidential information and electronic records, including metadata, and prohibited interference with or destruction of relevant electronic materials. (DIFC Courts)

Relevance to crypto fraud

Crypto-fraud cases may involve:

exchange records;

wallet information;

employee communications;

trading data;

metadata;

digital correspondence.

Preservation of this evidence can be critical because the evidence connecting a wallet to a person may disappear even though the blockchain transaction itself remains visible.

17. Gate Mena and the “Two Innocent Parties” Problem

A particularly important issue arises when the fraudster disappears.

Example:

Fraudster hacks Customer A's account.
Fraudster instructs Exchange B to transfer 100 BTC.
Exchange B follows the instruction.
Fraudster disappears.

Now:

Customer A says the BTC was stolen.

Exchange B says it followed the apparent instruction.

The fraudster cannot be sued effectively.

The legal question becomes:

Which party bears the loss under the applicable contractual, property and civil-liability rules?

Gate Mena demonstrates that the answer requires detailed examination of the factual and contractual allocation of risk rather than simply identifying who ultimately lost the cryptocurrency. (DIFC Courts)

18. Damages in Cryptocurrency Fraud

Damages can be particularly difficult because crypto prices fluctuate.

Suppose:

10 BTC were stolen;

value at theft = AED 1 million;

value at filing = AED 1.4 million;

value at judgment = AED 2 million.

Which figure should be used?

Potential questions include:

What was the date of breach?

Could the claimant mitigate?

Could the claimant reacquire the cryptocurrency?

Was the asset itself recoverable?

Should damages be denominated in crypto or fiat?

What valuation date is legally appropriate?

Is appreciation recoverable?

What interest should apply?

The 2026 Gate Mena retrial demonstrates how central these questions can become. The Court considered alternative USD valuation methodologies and the significance of mitigation. (DIFC Courts)

19. Crypto or Fiat as the Remedy

A claimant might request:

Remedy A — Return of crypto

“Return my 100 BTC.”

Remedy B — USD/AED damages

“Pay me the value of the 100 BTC.”

Remedy C — Alternative remedies

“Return the BTC or, if that is impossible, pay its legally recoverable value.”

The appropriate remedy depends upon:

ownership;

tracing;

availability of the asset;

contractual rights;

causation;

valuation;

applicable procedural law.

20. Fraudulent Crypto Investment Schemes

A typical investment fraud may operate as follows:

False advertisement

↓

Promise of guaranteed returns

↓

Victim transfers USDT

↓

Fake dashboard displays profits

↓

Withdrawal blocked

↓

Fraudster transfers funds

↓

Victim discovers fraud

Civil litigation may then target:

fraudster;

company;

investment intermediary;

exchange;

custodian;

recipient;

traceable assets.

However, liability cannot automatically be transferred to every participant merely because they were involved somewhere in the transaction.

21. Corporate Liability

If a cryptocurrency fraud is conducted through a company, separate legal personality remains relevant.

The claimant should distinguish between:

Company liability

and

Personal liability of directors/shareholders.

Personal liability may require an independent legal basis such as:

personal fraud;

personal tort;

guarantee;

direct contractual undertaking;

statutory liability;

recognised basis for disregarding corporate personality.

Mere ownership of the company does not automatically make the shareholder personally liable for every corporate debt or wrong.

22. Multiple Defendants

Crypto fraud frequently involves multiple participants.

For example:

The claimant must establish a legal basis for relief against each defendant.

23. Evidence Required

A strong cryptocurrency fraud claim normally requires several categories of evidence.

Blockchain evidence

wallet addresses;

transaction hashes;

blockchain timestamps;

transaction amounts;

destination addresses;

subsequent transfers.

Contractual evidence

exchange agreement;

custody agreement;

investment agreement;

terms of service;

trading instructions.

Communications

emails;

WhatsApp;

Telegram;

SMS;

social media messages.

Identity evidence

KYC;

passport/ID information;

company records;

bank accounts;

exchange accounts.

Technical evidence

IP logs;

device information;

authentication records;

cybersecurity reports;

blockchain analytics.

24. Expert Evidence

Technical expert evidence may be required to explain:

blockchain transactions;

wallet architecture;

private keys;

transaction tracing;

exchange infrastructure;

smart contracts;

token transfers;

cyber intrusion;

cryptocurrency valuation.

However, an expert does not decide the legal question.

The court decides:

Was there a legally actionable wrong?

The expert assists with:

What technically happened?

25. Interim Relief Strategy

A crypto-fraud claimant may consider the following sequence:

Step 1 — Preserve evidence

Immediately preserve:

transaction hashes;

wallet addresses;

communications;

exchange records.

Step 2 — Trace

Identify:

original wallet;

recipient wallets;

intermediary wallets;

exchange deposits.

Step 3 — Identify

Use available evidence to identify the individuals/entities controlling the relevant accounts.

Step 4 — Preserve assets

Where legally justified, seek:

freezing relief;

proprietary injunction;

disclosure orders.

Step 5 — File substantive claim

Plead:

ownership;

fraud;

breach;

civil liability;

unjust enrichment;

tracing;

damages.

Step 6 — Enforcement

Once judgment is obtained, identify and enforce against available assets.

26. Defences to Cryptocurrency Fraud Claims

Defence 1 — Transaction was authorised

The defendant may say the claimant personally approved the transfer.

Defence 2 — No proof of ownership

The claimant cannot establish that the crypto belonged to it.

Defence 3 — No causal connection

The defendant argues that its conduct did not cause the claimed loss.

Defence 4 — Intermediary role

An exchange may argue that it acted only as an intermediary and had no duty alleged by the claimant.

Defence 5 — Contributory negligence

The claimant may be alleged to have:

disclosed credentials;

ignored security warnings;

failed to use available authentication;

authorised a suspicious transfer.

Defence 6 — Limitation

The claim may be challenged as out of time under the applicable law.

Defence 7 — Valuation

The defendant may dispute:

valuation date;

cryptocurrency price;

mitigation;

appreciation;

consequential losses.

27. Six Important Case Laws

The first four are directly or substantially connected with digital-asset disputes; the latter two are analogous digital-fraud/evidence authorities rather than cryptocurrency decisions. This distinction is important because UAE reported cryptocurrency case law remains relatively limited. (DIFC Courts)

28. Comparison of the Major Authorities

29. Onshore UAE Versus DIFC

A major caution is necessary.

Mainland UAE

Claims may be governed by:

UAE federal civil law;

Federal Civil Procedure Law;

Evidence Law;

Commercial Transactions Law;

cybercrime legislation;

personal-data legislation;

applicable virtual-asset regulation;

emirate-specific property/commercial rules.

DIFC

The DIFC has its own:

laws;

courts;

procedural rules;

Digital Economy Court;

digital-asset jurisprudence.

Therefore, a DIFC decision should not automatically be described as binding precedent for every mainland UAE court.

It may nevertheless be highly persuasive or practically important depending upon the applicable legal regime and jurisdiction.

30. Practical Legal Formula

For an examination or legal research answer, the following formula is useful:

Crypto Fraud → Identify Asset → Establish Ownership → Establish Fraudulent Conduct → Trace Blockchain Transactions → Identify Recipient → Establish Jurisdiction → Preserve Assets → Obtain Disclosure → Establish Liability → Prove Causation → Quantify Loss → Seek Restitution/Proprietary Recovery/Damages → Enforce.

31. Key Legal Principles

Principle 1

Cryptocurrency can receive legal protection as property.

Principle 2

Wallet control is not necessarily the same as legal ownership.

Principle 3

Blockchain tracing can establish movement of assets, but additional evidence may be necessary to identify the person behind an address.

Principle 4

Crypto fraud may generate contractual, tortious, restitutionary and proprietary claims simultaneously.

Principle 5

Interim asset-preservation measures can be crucial because crypto can be rapidly transferred.

Principle 6

An exchange or bank is not automatically liable merely because its infrastructure was used in a fraud; the applicable duty, conduct and causation must be established.

Principle 7

Damages for cryptocurrency loss require careful consideration of valuation and mitigation.

Principle 8

The appropriate remedy may be return of the cryptoasset rather than merely its fiat equivalent, where a proprietary claim is established and the asset can be recovered.

Principle 9

A defendant's personal liability must have an independent legal basis where corporate personality applies.

Principle 10

The 2026 UAE Civil Transactions Law must now be considered for federal civil-law analysis, while older cases based on the repealed 1985 Civil Code require appropriate statutory caution. (UAE Legislation)

32. Conclusion

UAE cryptocurrency fraud civil claims sit at the intersection of traditional civil law and digital-asset technology.

The central legal questions are:

Who legally owns the cryptoasset?

How was the fraud committed?

Who controlled the relevant wallet or account?

Where did the cryptocurrency go?

Can it be traced?

Who owes the relevant legal duty?

Can assets be frozen before they disappear?

Can exchanges or intermediaries be compelled to provide information?

Should the remedy be restitution, return of crypto, damages, or a combination of appropriate remedies?

What valuation methodology applies?

The UAE's emerging jurisprudence demonstrates that cryptocurrency fraud is no longer simply treated as an ordinary financial dispute. Gate Mena addresses cryptocurrency as property, custody, control, fraud and damages; Techteryx demonstrates sophisticated proprietary, freezing and disclosure remedies in digital-asset litigation; and Aegis Resources illustrates how UAE/DIFC courts analyse responsibility for losses caused by electronic fraud. (DIFC Courts)

The most useful overall framework is therefore:

Digital Asset → Ownership → Fraud → Blockchain Tracing → Defendant Identification → Interim Protection → Disclosure → Civil Liability → Causation → Valuation → Restitution/Damages → Enforcement.