Major UK Legal Panel Recognizes Crypto-assets as Tradable Property
A specialized task force of senior judges and lawyers in the UK has moved to clarify the status of cryptocurrencies under English law.
According to the UK Jurisdiction Taskforce of the Lawtech Deliver Panel, crypto-assets (or ‘cryptocurrencies’ as they are also known) can be treated as tradeable property. Besides, smart contracts are enforceable agreements.
Cryptocurrencies are property in the UK?
“Crypto-assets, including but not restricted to, virtual currencies, can be treated in principle as property […] smart contracts are capable of satisfying the requirements of contracts in English law and are thus enforceable by the courts. Statutory requirements for a signature can be met by techniques such as private key encryption”, read the legal statement.
The announcement comes after a six-month consultation period and provides relative clarity for the cryptocurrency and blockchain industry.
That clarity was the purpose behind a public consultation announced back in May when the Chancellor of the High Court, Sir Geoffrey Vos, stated:
“The answers to those legal questions will provide a dependable foundation for the mainstream utilization of crypto assets and smart legal contracts. The initiative was a watershed for English law and the UK‘s jurisdictions. No other jurisdiction has attempted anything like it.”
The legal statement said crypto-assets have all of the indicia of property, giving cryptocurrencies and blockchain a legal standing similar to physical assets.
“The statement represented not what they would like the law to be, but what they believe English law to be now. Other jurisdictions have addressed the problem differently, starting with regulations and remedies, and worked backward […] There is no point in introducing regulations until you understand the legal status of the asset class you are seeking to regulate”, Sir Vos added.
Calling the statement a “watershed,” Sir Vos said it addresses a number of “difficult legal topics in a very approachable and intelligible manner.”
The taskforce has now asked the Law Commission – tasked with keeping the law of England and Wales under review and recommend reforms — to confirm if any legislation would be desirable. Going forward, the Law Commission will consider whether any legislation may be desirable in the area of crypto assets, Vos said.
A “21st-century approach”
On a different side, Andrew Yang, one of the candidates looking to take on U.S. President Donald Trump in the 2020 presidential election, has detailed his plan to bring in cryptocurrency regulations in the country.
In a blog post published late last week, Yang claimed:
“Cryptocurrencies are seeing levels of fraud because of the lack of regulation and the U.S. needs to catch up ahead of big tech companies and other countries in the space. Big tech companies have amassed too much power, largely profiting from our personal data, and unaccountable responsibility – we have reached a point where the government needs to step in.”
Yang further said that the U.S. Congress members currently lack a basic understanding of blockchain, cryptocurrencies, and other technologies, as revealed by recent hearings with tech CEOs like Facebook’s Mark Zuckerberg.
Currently, there is no national framework for regulating cryptocurrencies. The different departments of the federal government consider digital assets like property, commodities, or securities. New York’s BitLicense, for instance, as excessive regulation and that navigating different rules has had a “chilling” effect on the U.S. digital asset market.
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