The Law Commission of England has initiated a consultation on a draft bill that aims to officially designate crypto assets as a distinct form of property. This move follows the commission’s final report on digital assets in June 2023, where it proposed legislative changes to address legal uncertainties surrounding cryptocurrencies.
Significance of Recognizing Cryptoassets as Property
The Law Commission considers the formal recognition of crypto assets as property crucial for enabling individuals and businesses to fully utilize them. It emphasizes the necessity for courts to appropriately safeguard property rights associated with digital assets, especially in situations like insolvency or unlawful interference with assets.
Digital assets pose unique challenges due to their significant differences from physical assets and traditional forms of personal property. The commission acknowledges these distinctions, emphasizing the need for a new category tailored to the characteristics of crypto assets.
Simultaneous Call for Evidence on Related Project
Concurrently, the Law Commission has issued a call for evidence on a separate project related to digital assets and electronic trade documents within private international law. Stakeholders have until March 22nd to provide feedback on the draft legislation and until May 16th for the private international law project.
The draft legislation and parallel projects are the culmination of years of review by the Law Commission. Their primary objective is to offer enhanced legal clarity and protections for users of cryptoassets. Additionally, aligning with the UK government’s aspirations, these initiatives seek to position London as a leading global center for cryptocurrency innovation and investment.
