In a volatile week for digital assets, the United Arab Emirates is reaffirming its commitment to cryptocurrency, even as the sector faces mounting turbulence.
A token issued by a Hong Kong-based blockchain firm — backed by Abu Dhabi’s Shorooq Partners — suffered a catastrophic 90% drop in value within hours last week, wiping out an estimated $5 billion in market capitalization. The collapse came shortly after the firm inked a high-profile $1 billion tokenization deal with Dubai’s DAMAC Group. Approximately $250 million worth of the token changed hands in the days preceding the crash, though Shorooq denied offloading any of its holdings, according to a report by AGBI.
Regulatory scrutiny also intensified. Just days before the crash, Abu Dhabi authorities fined crypto platform Hayvn $12.5 million for operating without proper financial licensing. Its CEO was banned from conducting financial services in the region. Despite the regulatory action, no client assets were reported lost.
Nevertheless, the UAE continues to make bold bets on the future of crypto. MGX, a firm backed by sovereign wealth fund Mubadala and AI giant G42, recently poured $2 billion into Binance, the world’s largest cryptocurrency exchange. Meanwhile, Abu Dhabi’s DWF Labs disclosed a $25 million investment in tokens linked to former U.S. President Donald Trump’s crypto venture, making it one of the project’s largest stakeholders.
While the risks are evident, the UAE’s growing financial and institutional involvement signals a long-term vision: to establish itself as a global hub for digital assets — crashes and controversies notwithstanding.
