Crowdfunding using Blockchain according to the UAE Legal System

As a result of the crises happing worldwide, technology has become critical to overcoming the challenges imposed by ongoing international conditions. It is critical to find innovative ways to increase economic growth, especially in developing countries. Startup investments increase job opportunities and reduce unemployment rates and are therefore considered catalysts for economic growth. In this regard, technology innovated creative means of financing such as crowdfunding platforms or digital financing. It enables micro, small and medium enterprises to borrow digitally through blockchain, instead of resorting to traditional institutions. Crowdfunding is, therefore, a creative and innovative mechanism to finance entrepreneurs.

In this paper, the legal concept of Crowdfunding using blockchain technology is examined, along with issuing security tokens that takes place through blockchain networks as part of the UAE government's quest to apply blockchain technology and the efforts of the Dubai Future Foundation to apply the latest technologies and innovative practices globally. Dubai Future Foundation announced the establishment of the Global Council for Digital Transactions to explore and investigate current and future applications, and to regulate digital transactions through "Blockchain" technology. Through blockchain, it is possible to record and document all digital transactions and commercial trades and regulate its activities in accordance with the Cabinet Resolution No. 36 of 2022. Moreover, the trading of crypto assets within the country is regulated by the decision of the Chairman of the Securities and Commodities Authority No. 23 of 2020 as well as, the Emirate of Dubai Law No. 4 of 2022 concerning the regulation of virtual assets.