The Dubai Court of First Instance has set a new precedent by recognizing cryptocurrency as a valid form of salary payment under employment contracts.

The court made this significant decision in a case where an employee accused their employer of failing to pay more than 5,000 EcoWatt (EWT) tokens, which were part of their contractual agreement. According to the case details, the employer, who the employee also alleged fired them improperly, did not pay the crypto portion of their salary for six months. The court ruled in favor of the employee, acknowledging the validity of cryptocurrency as a form of salary and ordering the EcoWatt payment to be made, as initially agreed upon in the employment contract.

The court also emphasized that wages are a fundamental right and that an employer is obligated to fulfill the terms of a contract, including any crypto component, unless there is evidence proving payment.

“Wages are a fundamental right and must be fulfilled as per the terms of the contract, including any cryptocurrency components.”

A year ago, the same court ruled against a similar complainant who alleged that their employer failed to pay them using the same EcoWatt tokens. In that case, the court dismissed the plaintiff’s claims because they did not provide a clear method for determining the fiat value of the said EcoWatt tokens. However, this latest judgment reflects a more expansive interpretation of the United Arab Emirates’ labor laws, especially regarding digital assets in employment contracts.

Dubai was among the early jurisdictions to adopt cryptocurrency, starting with the 2016 Dubai Blockchain Strategy. Its favorable tax regulations and booming venture capital investment scene have made the city a favorite among crypto projects. Major crypto companies such as Binance, OKX, and Crypto.com have a significant presence in the city, having recently acquired virtual asset service provider licenses, a requirement to operate a crypto platform in the city.

Many of these companies pay their employees in crypto. For instance, former Binance CEO Changpeng Zhao previously mentioned that a large percentage of the exchange’s employees get paid in crypto. The court’s recognition of crypto as a valid payment now sets a new legal precedent that should guide the conduct of such companies in the UAE.

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