Dubai Court Rules Cryptocurrencies Are a Valid Form of Salary Payment

This could set a strong precedent for the United Arab Emirates.

A court in Dubai has ruled that cryptocurrencies are a valid form of salary payment – even if there is no clear value for the token. This could set a strong precedent for the United Arab Emirates.

In Dubai, a former employee sued a company for wrongful termination and for not receiving his salary or promised bonuses. The unique aspect of the case was that part of the salary was agreed to be paid in a traditional fiat currency and a bonus of 5,250 EcoWatt tokens (EWT).

The employer had resisted paying the employee the EcoWatt tokens that were due for six months. But following the plaintiff's claim, the court changed its stance significantly.

Just last year, a court in Dubai dealt with EcoWatt tokens in another employee's lawsuit. It ruled that while the EWT tokens were part of the employment contract, it did not recognize that the employer owed them because the employee did not provide the court with a method to calculate a clear value for the EcoWatt tokens.

No wonder. The EWT tokens from EcoWatt are supposed to be part of a „platform for renewable energy, climate action, and social projects“ with a worldwide reach. But what exactly the company, registered in Vilnius, Lithuania, does and what the EWT token has to do with it remains opaque and untrustworthy due to the high density of buzzwords and AI-generated images. The connection to Dubai also remains vague, especially considering why a company in Dubai would promise its employees a bonus in EWT and then fail to pay it.

The token itself circulates on Polygon and was minted there about three years ago. Almost 79 percent of the token supply is held by one address, with two others holding 11 and 4.3 percent. Only a small remaining portion circulates in the open market. There is no price for the token on either decentralized or centralized exchanges. Hence, it is impractical for the employer to pay the token, especially for tax reasons. Last year, the court dismissed the claims, seeing no proof that the tokens had any value.

This year, another employee filed a similar lawsuit involving a bonus in EWT tokens. But this time, the court ruled in favor of the employee. It recognized that EcoWatt tokens were part of the salary and ordered that they be paid directly as tokens rather than in fiat money.

Observers see this as a groundbreaking decision. The United Arab Emirates not only accepts that cryptocurrencies are a means of payment that can also be part of an employment contract, but they might be the first court ever to order that it be paid as the token itself. This might be the first time a court mandates a blockchain payment. This can indeed be seen as a breakthrough – not just for Dubai.