Reform of the law on cryptocurrencies and non-fungible tokens (NFTs) has been proposed by the Law Commission of England and Wales.
In its 549-page proposal document, the Commission has put forward recommendations for new laws relating specifically to digital assets — or “data objects” — given their differences to ‘traditional’ assets.
The new laws would see crypto defined separately within property law, with the aim of making it easier for UK courts to detemine cases of ownership disputes and hacks.
The Commission’s proposals aim to deliver wider recognition and legal protections for digital assets, allowing a more diverse range of people, groups and companies to interact online and benefit from them.
The Government asked the Law Commission to review the existing law on digital assets, to ensure that it can accommodate evolution and expansion in this area, and to recognise and protect the rights of users and maximise the potential of digital assets.
Under current rules, there are two recognised types of legal property: things in possession, and things in action.
‘Things in possession’ encompass tangible, physical objects, such as gold bullion. ‘Things in action’ is a concept or idea upheld through legal actions or proceedings.
Cryptocurrencies, for example, meet the criteria of neither of these forms of property.
In its paper, the Law Commission is proposing the introduction of a new form of property: data objects. Data objects would be composed data represented in an electronic medium.
The Commission is now seeking views on the proposals from legal experts, technologists and users.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
