An American cryptocurrency entrepreneur locked in a legal dispute with Sam Lee, the CEO of the collapsed crypto fund HyperVerse, has been detained in Dubai and alleges police have tortured him into signing a false confession, the Guardian can reveal.

Edel Hsieh, 43, from California, was first arrested in March at Dubai’s airport while attempting to fly to London. Police beat him during his interrogation, he said.

“They torture us for our confession,” said Hsieh on a jail call recording obtained by the Guardian. “They said, ‘I will rape you, hold you and send you back to China.’ They slammed my head against the table, my arms were twisted and held up behind me.” When the police saw pictures of his wife on his phone, they threatened to rape her too, and the police also demanded money from him, he said on the call. The US consulate in Dubai said it could not help him.

“They used tools or something sharp to jam into my ribs,” said Hsieh. “They kept on punching.”

The entrepreneur suspects one of his other business partners besides Lee has retaliated against him by filing a suit alleging theft, according to his wife. She claims this legal complaint is the cause of Hsieh’s arrest and detainment. Financial disputes can be criminalized and result in arrest in Dubai.

Hsieh has been detained at Al Barsha jail in Dubai for the past two months. On 1 May, while still incarcerated, he was notified he would be charged with theft and “committing a felony”, his wife said, and he has signed a confession. His wife requested anonymity, as she fears backlash for speaking out about his detention. She is currently living in another country in the Middle East and is scared of returning to the UAE, she said. A spokesperson for the United Arab Emirates did not immediately respond to a request for comment.

“He has been wearing the same clothes since 5 March; the police do not allow them to receive clothes or see anyone from outside,” she said. She claimed Hsieh was suffering from a severe eye infection, had breathing difficulties due to allergies, and had not been granted access to medication.

Hsieh first moved to Dubai to develop Fomodex, a cryptocurrency exchange company that shut down in 2022, with Lee and another partner in 2021, Hsieh’s wife said. After Hsieh raised objections to the way the business functioned, which he came to believe was fraudulent, he requested Lee refund his investment, his wife alleged. Lee provided Hsieh with cheques purportedly totaling $2.7m that then bounced, so Hsieh filed a case against him, according to emails from Hsieh’s lawyer.