WEB3
by Soumen Datta
August 16, 2024
The case involved an employee who was not paid a portion of their salary in EcoWatt tokens, as stipulated in their contract.
The Dubai Court of First Instance ruled that salary payments in cryptocurrency are legally valid under employment contracts.
This ruling, delivered in case number 1739 of 2024 (Labour), marks a significant evolution in the UAE's legal approach to cryptocurrency, setting a precedent for future cases involving digital currency payments.
The case began when an employee filed a lawsuit against their employer, claiming unpaid wages, wrongful termination compensation, and other related benefits. According to the employment contract, the employee was entitled to a monthly salary in fiat currency, as well as an additional payment of 5,250 EcoWatt tokens, a type of cryptocurrency.
The dispute arose when the employer failed to pay the EcoWatt token portion of the salary for six months. The employee sought legal redress, arguing that the employer’s failure to pay the cryptocurrency portion constituted a breach of contract.
In 2023, the same court had dealt with a similar case where part of the employee’s remuneration was supposed to be paid in EcoWatt tokens. However, in that instance, the court ruled against the employee, primarily due to the lack of a clear method for valuing the cryptocurrency in terms of its fiat currency equivalent.
This earlier ruling reiterated that tangible and precise valuation of financial obligations is essential, especially when those obligations involve non-traditional assets like cryptocurrency.
The 2024 ruling represents a significant departure from the court's previous stance. This time, the court recognized and enforced the payment of the salary in EcoWatt tokens as specified in the employment contract, without requiring the conversion of the tokens into fiat currency.
Dubai’s legal landscape has been evolving to accommodate the growing interest in cryptocurrencies.
In 2022, the city implemented the Dubai Virtual Asset Regulation Law and established the Dubai Virtual Assets Regulatory Authority (VARA), creating a comprehensive legal framework for businesses related to virtual assets, including cryptocurrencies and non-fungible tokens (NFTs).
Dubai's favorable tax environment further enhances its status as a cryptocurrency hub. The city, part of the United Arab Emirates (UAE), does not impose personal income tax or capital gains tax on individual investors, making it an attractive destination for those looking to optimize their tax liabilities on income and capital gains from crypto investments.
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCNews. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. BSCNews assumes no responsibility for any investment decisions made based on the information provided in this article
Author
Soumen Datta
Soumen is an experienced writer in cryptocurrencies, DeFi, NFTs, and GameFi. He has been analyzing the space for the last several years and believes there is a lot of potential with blockchain technology, even though we are still at an early stage. In his spare time, Soumen enjoys playing his guitar and singing along. Soumen holds bags in BTC, ETH, BNB, MATIC, and ADA.
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