UK Introduces Bill to Clarify Crypto’s Legal Status

As a seasoned researcher with a keen interest in digital assets and their legal implications, I find this bill to be a significant stride towards clarifying the murky waters of crypto ownership. With years spent navigating the complexities of traditional property law and its application to emerging technologies, it’s refreshing to see the U.K. government taking decisive action.

The British government presented a proposal to Parliament regarding the legal standing of digital assets such as cryptocurrencies, NFTs (Non-Fungible Tokens), and digitally represented real-world assets.

As an analyst, I can express this in the following manner: Under the proposed bill, these assets will be recognized as personal property according to British law. Upon its enactment, it will offer legal professionals a framework for resolving ownership disputes, such as those that may arise during a divorce. Moreover, it will establish safeguards for crypto owners, whether they are individuals or businesses, who fall victim to fraud and deceit.

At the heart of this proposal lies a novel classification for property, distinct from the current “possessions” and “actions.” Possessions include tangible items like money and cars, while actions involve intangibles such as debt and shares. The proposed new category, labeled as “digital things,” is intended to grant personal property rights to certain digital assets, as stated by Justice Minister Heidi Alexander.

Previously this year, the Law Commission – an organization responsible for examining and suggesting improvements to laws in England and Wales – released a consultation about draft legislation that classifies cryptocurrency as a form of property. Following their analysis, they published a report detailing their findings. The conclusions primarily concern crypto tokens, as per the Ministry of Justice.

The Law Commission stated in their report that certain digital assets aren’t considered as tangible possessions or actions, yet English and Welsh law regards them as entities where ownership rights can be established.