UK Law Commission Seeks To Classify Cryptocurrencies As “Property” In New Draft Bill

Freshly proposed UK legislation would see cryptocurrencies officially classified as a new form of property, establishing greater legal certainty around digital assets at large.

On Thursday, the Law Commission of England launched a consultation exercise on its proposed legislation, which is designed to clarify “a position that courts have been increasingly moving towards.” It expects responses within one month.

UK Looking For Cryptocurrency Clarity

“We conclude that the flexibility of common law allows for the recognition of a distinct category of personal property that can better recognize, accommodate and protect the unique features of certain digital assets (including crypto-tokens and cryptoassets),” the commission wrote.

The proposal is a follow-up to the statutory body’s report on digital assets released in July 2023, recommending legislative changes that would remove any legal uncertainty around digital assets.

If passed, the bill would help enforce property rights around crypto in heretofore legal grey areas.

IMO Stable Coin legislation is around the corner – exploding crypto marketcaps 10-20x.

Continuing from my previous post theme earlier – the UK has now expidited legislation to recognize crypto as property.👀

The UK is blazing ahead people. Crypto and particularly Stable Coin… pic.twitter.com/RtZEzGyHTI

— MartyParty (@martypartymusic) February 22, 2024

For example, if digital assets are subject to a legal dispute where the holder could dissipate those assets before the dispute is resolved, a court could order a proprietary freezing injunction over those assets – a remedy already available for traditional forms of property.

“If someone’s digital assets are taken from them or destroyed, the remedies available to them are significantly stronger if those assets are regarded as being their property than if the law does not recognize any property interest in them,” the commission explained.

Property In The UK

Current English law recognizes two forms of property rights: “things in possession” (tangible things) and “things in action” (legal rights or claims enforceable by action).

While legal precedent has often been used to enforce the existence of only these two forms of property rights, recent court cases involving crypto tokens have encouraged government consultants to begin accommodating a “third category.”

Though the new category still has no concrete boundaries, the commission clarified that it won’t encompass certain “non-rivalrous” things like digital files, email accounts, and certain in-game assets.

Earlier this month, the Bank of England closed its consultation on its proposed regulatory regime for payment stablecoins. The regime advocated for maintaining constant convertibility of stablecoins and provided guidance on what forms of collateral stablecoin issuers should be able to hold.

Some crypto firms have credited the UK for being more proactive on crypto legislation than their United States counterparts.