¶ 3901
Overview
Scope of the chapter. This chapter examines the digital-asset regimes of two groups of jurisdictions that matter to institutions, funds and wealthy families out of proportion to their size. The first group is the Gulf, and in particular the United Arab Emirates, where a federal state, an emirate-level regulator and two common-law financial free zones each claim a part of the field. The second group is the offshore financial centres in which exchange groups, token issuers, funds and family structures are commonly organized: the Cayman Islands, the British Virgin Islands, Bermuda, The Bahamas, Gibraltar and the Crown Dependencies. For each jurisdiction the chapter identifies the statute and the regulator, the activities that require a licence or registration, the rules on custody and segregation of client assets, the private-law treatment of digital assets where the jurisdiction has addressed it, and the decisions of its courts. It closes with the factors that guide a choice among them and a checklist.
Why these jurisdictions. Three features recur. Each jurisdiction adopted a dedicated statute for virtual-asset service providers while most onshore jurisdictions were still applying money-transmission or securities law by analogy, so their regimes are older and more specific than many. Each has a body of company, trust and foundation law that is already used for cross-border holding structures, so a digital-asset business can be placed inside a familiar corporate and fiduciary framework. And each is a common-law jurisdiction or contains common-law enclaves whose courts follow, or are free to draw on, English authority. That last point connects this chapter to the English and Commonwealth cases on the property status of digital assets examined in ch. 4 and the recovery remedies examined in ch. 25.
Regulatory law and private law. The chapter keeps two questions apart. The first is regulatory: who may carry on a digital-asset business in or from the jurisdiction, on what conditions, and under whose supervision. The second is private law: whether a digital asset is property, how title passes, what a custodian holds for its client, and what happens on insolvency. Most of the statutes discussed answer only the first question. The Dubai International Financial Centre is an exception. Its Digital Assets Law, which came into force on March 8, 2024, states rules of property, control and title for digital assets, and its Court of Appeal decided in June 2024 that bitcoin is property of a third kind. Those two sources are treated at ¶ 3940 and are the most developed body of Gulf private law on the subject.
The state of the sources. The regimes in this chapter change frequently. Several regulators publish their rules through online rulebooks that are amended without a fixed reprint cycle, and some statutes have been consolidated into revised editions with new numbering. Where this treatise has read the primary text, the citation says so in the research notes for the chapter. Where only an official summary or a professional commentary could be consulted, the text attributes the statement to that source. The dates given are those of the instrument cited, and practitioners should confirm the current version of any rulebook before advising on it.
Relationship to other chapters. Custody models and the legal analysis of shared control are treated in ch. 9, and the private-law character of the custodial relationship in ch. 10. The regulatory treatment of custodians in the United States is examined in ch. 11. Foundations and purpose trusts organized in these jurisdictions are treated in ch. 18, and DAO wrappers, including the Marshall Islands DAO Act, in ch. 20. The insolvency of FTX Digital Markets Ltd. in The Bahamas is examined in ch. 28. Anti-money-laundering and travel-rule obligations, which apply in every jurisdiction discussed here, are treated in chs. 33 and 34. The fuller discussion of offshore trusts used for asset protection appears in Lighthouse on Asset Protection.
Terminology. The jurisdictions use different words for overlapping concepts. Dubai and the Cayman Islands speak of "virtual assets" and "virtual asset service providers," following the vocabulary of the Financial Action Task Force. The Dubai Financial Services Authority uses "crypto tokens" for its regulatory regime, while the Dubai International Financial Centre's Digital Assets Law uses "digital asset" for its property-law rules. Bermuda speaks of "digital asset business." Gibraltar uses "DLT Provider" and "VAA Provider." This chapter uses each jurisdiction's own term when describing its law and "digital asset" when speaking generally, consistent with ch. 1.
Plan of the chapter. Section ¶ 3910 describes the layered structure of regulation in the United Arab Emirates and the federal payment-token rules. Section ¶ 3920 treats the Dubai Virtual Assets Regulatory Authority, ¶ 3930 the Abu Dhabi Global Market, and ¶ 3940 the Dubai International Financial Centre, including its Digital Assets Law and the Huobi decision. Section ¶ 3950 addresses Bahrain and Saudi Arabia briefly. Sections ¶ 3960 to ¶ 3980 treat the offshore centres and their courts. Section ¶ 3990 sets out the factors that govern a choice of jurisdiction and a checklist.