U.K. Paper Defines Crypto Assets as Property, Smart Contracts as Lawful Agreements
- A panel of British judges and lawyers has recognized crypto assets as “tradeable property”.
- It also defines smart contracts as “enforceable agreements”, and attempts to address the legal uncertainties of cryptocurrency.
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The U.K. Jurisdiction Taskforce (UKJT) of the Lawtech Delivery Panel (LTDP) has recognized crypto assets as “tradeable property” under British and Welsh private law, according to a paper Tech Nation published on 18 November.
The paper not only recognizes crypto assets as tradeable property, but also defines smart contracts as “enforceable agreements” under English law.
The legal statement also aims to address the legal uncertainties of cryptocurrency, which many believe is the most significant barrier to the adoption of crypto and smart contracts.
The chairman of the UKJT, Geoffrey Vos, said:
“In legal terms, cryptoassets and smart contracts undoubtedly represent the future. I hope that the Legal Statement will go a long way towards providing much needed market confidence, legal certainty and predictability in areas that are of great importance to the technological and legal communities and to the global financial services industry.”
The legal statement was drafted by Lawrence Akka QC, David Quest QC, Matthew Lavy and Sam Goodman, and was supported by members of the UKJT, and multinational law firm Linklaters LLP.
It was finalized after consultation with the “tech community”, the financial sector, as well as regulators and legal experts.
The LTDP is an industry-led government-backed effort aimed at transforming the U.K. judiciary system through technology, with the Jurisdiction Task force being one of its six panels.
The taskforce has members such as Christopher Woolard, board member of the Financial Conduct Authority, Sir Antony Zacaroli, justice of the high court, and is chaired by Vos, a chancellor of the U.K.’s high court.
- The decision has placed Hong Kong in line with other common law jurisdictions that had previously ruled crypto had the same attributes as property.
- This will give liquidators in Hong Kong greater clarity on how to handle crypto held by companies that are winding down.
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- The head of the FCA, Nikhil Rathi, made the announcement during a speech at the “Our Role and Business Plan” webinar on Thursday.
- Rathi said the digital marketing campaign was necessary, as crypto investors are more likely to be young people drawn to social media.
- The FCA now requires “all crypto asset exchange providers and custodian wallet providers” to submit annual financial crime reports.
- The move follows the regulator’s plan to increase its regulatory oversight in the crypto space, which began in January 2020.