Dubai says yes to Crypto salaries

A court in the United Arab Emirates has recognized cryptocurrencies as a form of wage payment in a landmark ruling affecting employment contracts.

According to a report by Lexology, the ruling by the Dubai Court of First Instance contrasts sharply with a decision made in a similar case and highlights the growing adoption of cryptocurrencies in the UAE.

Crypto as salary payment

The plaintiff sued his former employer for wrongful dismissal and unpaid wages, seeking back pay and other employment benefits. The employment contract stipulated a monthly salary in United Arab Emirates Dirham (AED) and 5,250 EcoWatt Tokens (EWT). EcoWatt is a cryptographic project that combines renewable energy and blockchain technology to impact the global climate crisis.

The lawsuit centered on the wrongful termination of the plaintiff’s employment and the defendant’s failure to pay EWT tokens for six months.

During the hearing of the case, the court recognized the validity of the crypto payment, ruled in favor of the plaintiff and ordered the defendant to settle the wages in EWT as stipulated in the employment contract instead of converting the value in fiat

“Since the defendant did not provide evidence of payment of the plaintiff’s salary during the claimed period, and since the documents were void of such evidence, the court orders the defendant to pay the plaintiff (redacted) AED in addition to the (redacted ) EcoWatt tokens,” the court stated.

Growing Crypto Acceptance

Last year, the same Dubai Court of First Instance took a different stance against remuneration of employees in cryptocurrencies. The case also involved unpaid wages in EcoWatt tokens, but the court ruled in favor of the defendant because the plaintiff did not provide a specific valuation of fiat cryptocurrencies.

Although the court recognized the existence of EWT in the employment contract, it did not order the employer to pay the plaintiff the tips.

“Since the plaintiff did not provide evidence of the value of the digital currency (EcoWatt tokens), the court disregards it, since the defendant did not provide opposing evidence or any defense and therefore the court concludes that the duration of service of the plaintiff was (redacted) and that the gross and basic salary was (redacted) AED, and the court rules the case accordingly,” the court ruled.

Although the court’s ruling in 2023 reflected a traditional approach to cryptocurrencies, the recent decision shows an acceptance of these assets.

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