A landmark report could redefine the legal status of crypto assets in the UK.
In latest crypto news, the Law Commission of England and Wales issued a final report on July 30, urging the UK government to classify all crypto assets as a new type of personal property.
As an independent body focused on law reform, the Commission also released a supplementary report highlighting existing legal gaps in this area.
These shortcomings pertained to the existing categorization of personal property and its legal implications for crypto assets.
English law divides personal property into two primary types: tangible property (things in possession) and intangible property (things in action, like debts or rights). The commission highlighted that digital assets, including cryptocurrencies and NFTs, can exhibit characteristics of both types, complicating dispute resolution in court.
To address this, they recommended establishing a “third category” to clarify and enforce property rights related to crypto assets:
“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 crypto assets).”
The commission proposed a draft bill to create this separate category for crypto assets, aiming to establish a robust legal framework and support the growth of the digital assets sector in England and Wales.
A draft bill for the creation of a “third category” of personal property rights dedicated to crypto assets. At the time of writing this cryptocurrency news, regulators in England and Wales are set to review the draft bill.
Moreover, the bill entrusts courts with developing the third category for crypto assets, allowing for future amendments without affecting legal proceedings related to other forms of personal property.
The commission noted that the government is currently considering the recommendation and the draft legislation.
