ABU DHABI, The “Legal System of Cryptocurrencies in International Experiences” was the title of the international forum organised by Abu Dhabi Judicial Department (ADJD) to discuss newly devised systems worldwide and to exchange visions and ideas on ways to develop legislation that keeps pace with these evolutions.
The forum was organised as per the directives of H.H. Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister, Minister of Presidential Affairs and Chairman of Abu Dhabi Judicial Department, to apply the legal and judicial best practices that strengthen the business environment in line with the UAE’s vision for the next 50 years.
In his opening speech, Counsellor Ali Al Shaer Al Dhaheri, Director of the Judicial Inspection Division, stressed the importance of discussing the issue of the legal system of cryptocurrencies as an important topic given its impact on global markets. There was a need to consider all aspects related to these currencies and the risks they entail, making it necessary to define a legal and legislative framework to protect users and regulate their use in accordance with financial and economic regulations adopted worldwide.
Judge Sultan Al Neyadi, President of the Abu Dhabi Commercial Court, discussed the effect of technological, financial and monetary advances on the judicial and legal environment, particularly in light of the problems posed by digital currencies and the questions they raise about the legality of their circulation. They form a virtual digital monetary system parallel to the traditional system that aims to achieve universality of exchange through them, with the inherent risk of being used for money laundering, criminal activities or tax evasion, in addition to the difficulty of confiscating or tracing them due to the ease with which they are obtained by creating online accounts which are, moreover, ultra-secure with the users’ data completely concealed.
He also touched on the risks associated with using cryptocurrencies with possible exposure to hacking or infiltration in the absence of an equivalent value for this currency. It calls into question their credit guarantees, the impossibility of indemnification in the event of loss for any reason whatsoever. Their confidential nature obscures their real data, resulting in tax losses for countries due to the lack of accurate information concerning this type of currency. Moreover, the unavailability of specific controls on this issue deprives users of protection against increasing hacking operations, as users have no binding disclosure and reporting obligations as is the case with procedures decided by central banks, he said.
Clayton J. Conlan, Judge of the Superior Court of Justice of Canada, reviewed the development of digital currencies over the past 12 years, their use in the public domain and their rise in value, as well as the problems associated with their undermining the role of the authorities by circumventing established controls. Therefore, work needs to be done to find some balance between encouraging innovation under specific controls and controlling these technological innovations. This is the challenge that governments worldwide are seeking to address by strengthening controls and preventing their use in criminal operations, he added.
Counsellor Ehab Ebrahim, from the Judicial Inspection Division, provided an update on the legislative scope of the forms and methods of circulation of cryptocurrencies and the risks they pose to the financial sector. He highlighted the difference between cryptocurrencies issued by individuals or unknown entities and currencies issued by central banks and traded by licensed companies. He said that this requires expanding the scope of modern legal theories to include all cryptocurrency transactions and regulating the relationship between the user and the trading platform.
British judge Naveen Agnihotri, from Abu Dhabi Commercial Court, discussed the legal system for cryptocurrencies in several countries, the applicable legislation governing cryptocurrencies and the companies that trade in them, in addition to government policies and the general approach to their regulation, as well as the regulators and the penalties that regulators can impose for violations related to these assets.
Source: Emirates News Agency