Pivotal Court Ruling in Dubai: Cryptocurrencies are Recoverable In-Kind or in Cash at Market Value on the Date of Enforcement

Pivotal Court Ruling in Dubai: Cryptocurrencies are Recoverable In-Kind or in Cash at Market Value on the Date of Enforcement
In a judicial precedent considered the first of its kind in the United Arab Emirates, the Dubai Commercial Court issued a landmark ruling in May 2025 addressing the legal complexity of dealing with cryptocurrencies in civil and commercial disputes, particularly given their sharp volatility and ease of transfer and concealment.

Background of the Dispute: A Digital Investment via “WhatsApp”
The case revolved around an investment agreement concluded via the “WhatsApp” application, through which the defendant received 29 Bitcoin and 102 Ethereum from the claimant, in exchange for a promise of a fixed 2% monthly return, a guaranteed principal sum, and the option for redemption at any time. When the claimant demanded the return of his assets, the defendant defaulted, prompting the claimant to seek legal recourse.

Dual Legal Strategy: Specific Performance or Cash Compensation at the Date of Enforcement
Before the court, the claimant asserted his right to the return of the cryptocurrencies in-kind (Specific Performance), based on the distinct nature of these digital assets as more than just a store of value, but unique assets that must be restored in their current form. Alternatively, if specific performance was impossible, the claimant sought monetary compensation, provided that it was calculated according to the market value of the currencies on the date of judgment enforcement, rather than the date of contract or filing the lawsuit.

The Verdict: Judicial Flexibility and Economic Realism
The Court ruled as follows:

• Termination of the investment agreement.
• Ordering the defendant to return 29 Bitcoin and 102 Ethereum in-kind.
• In the event of non-compliance, ordering the defendant to pay the equivalent market value in UAE Dirhams as of the date of judgment enforcement.

Legal Implications of the Ruling:

1. Official Recognition: Judicial recognition of cryptocurrencies as recoverable and justiciable assets, enhancing legal confidence in digital transactions.
2. Protection from Volatility: Adoption of the date of enforcement as the benchmark for valuing monetary compensation, which protects the creditor from market fluctuations.
3. Enforcement Possibilities: Opening the door for enforcement against virtual wallets, including the possibility of compelling platforms like Binance to comply with judgments.
4. Addressing Concealment: The Court’s acknowledgment of the difficulty in tracing digital assets, granting the claimant flexibility to opt for cash compensation if specific performance proves difficult.

This ruling constitutes a turning point in the UAE legal environment, affirming that cryptocurrency-based claims are justiciable and enforceable, provided they are structured and argued effectively before the judiciary.