The Law Commission of England and Wales has proposed that reform legislation is needed for cryptocurrencies and non-fungible tokens (NFTs). If enacted by the government, crypto would be defined separately within property law and make it easier to process cases — good news for politicians seeking to attract the crypto industry.
The Law Commission’s proposal to the government comes amid an ongoing project to provide clear rules on digital assets, set to happen early November. The paper argues new laws are needed to carve out a space for digital assets — or “data objects” — given how “unique” they are to traditional ones. This would make it easier for UK courts to figure out cases of ownership disputes and hacks, for example.
“It would allow the law to develop by analogy with things in possession or things in action where appropriate, while also recognizing that certain things do not fall neatly within either category,” it said.
For retail investors, the Law Commission hopes clear definitions in property law for digital assets will make it easier to hit back at hacks and scams in court. Speaking to CoinDesk, Commercial and Common Law Commissioner Sarah Green explained why such revisions are needed: “A lot of people just invest in NFTs, but they don’t ask the question ‘what happens when things go wrong?’”
“It’s not clear at all what happens if you hack into my wallet and take my bitcoin or if … this system fails and I can’t access my bitcoin.”
Law Commission proposal comes amid UK crypto hype
Crypto regulation is heating up in the UK, as politicians seek to make it a global crypto hub. Last week in a speech, prominent judge Geoffrey Vos stated: “We are in a period of very significant opportunity.”
“If English law and the UK’s jurisdictions can provide the legal backdrop of choice to [distributed ledger technology] systems, a big economic prize will follow,” (via Bloomberg).
The Law Commission is still wrapping up its project — until then, these proposals aren’t official. However, Bloomerg notes that come November, it’s likely the UK government will implement them.