New property law for crypto assets, advises Law Commission
The independent body has made several recommendations after it was asked by the government whether UK law can accommodate digital assets.
A new category of personal property law should be created to accommodate crypto assets, the Law Commission has advised.
The independent body has advised the government that UK law can accommodate crypto assets by adding a category of “digital objects” to existing categories of personal property law.
The Law Commission says that digital assets like crypto currencies and non-fungible tokens (NFTs) do not fit within the traditional categories of personal property.
Its recommendations follow the Law Commission publishing a consultation paper, advising that crypto should be treated as personal property, so it is easier for investors to recover losses if they lose funds.
Professor Sarah Green, law commissioner for commercial and common law, said: “The use and importance of digital assets has grown significantly in the law few years.
“The flexibility of the common law means that the legal system in England and Wales is well placed to adapt to this rapid growth.”
The recommendations from the Law Commission follow the then chancellor Rishi Sunak asking it to review whether current UK laws can accommodate digital assets.
Sunak wants the UK to become a crypto hub.
The Law Commission has also recommended the creation of a tailored framework for using crypto as collateral while it also recommends the government to set up “a panel of industry-specific technical experts to advise courts on complex legal issues relating to digital assets”.
Speaking to Reuters, Adam Sanitt, knowledge director at Norton Rose Fulbright, which contributed to the report, said the crypto industry would be reassured by the recommendations.
He said it would give more protections for crypto and digital asset holders.