The Law Commission of England and Wales presented a report in a bid to push to categorize all crypto assets as a new form of personal property.
🧑⚖️The Law Commission of England and Wales just proposed a groundbreaking idea: a new property category for crypto assets.
Why does this matter? Currently, crypto assets don’t fit neatly into existing property laws, creating legal headaches.
By creating a “third category,” we… pic.twitter.com/fXX4ObyeV7
— Darien Advisors (@Darien_Advisors) July 31, 2024
The Law Commission acts as an independent body across England and Wales. Its primary function is to review and recommend law reforms. The commission’s latest report on crypto assets was posted yesterday (July 30).
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It highlights the deficiencies of the current classification of personal property and its legal implications on digital assets.
Currently, English law separates personal property into two main categories;
- Things in possession (tangible property)
- Things in action (intangible property, such as debts or rights)
The Commission argues that digital assets, including cryptocurrencies and non-fungible tokens (NFTs), cross over into both categories above and, therefore, impede dispute resolution in court proceedings.
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A Third Category Deemed Necessary For Digital Assets
In the report, the independent body recommended the formation of a “third category” that better fits digital assets. It would ensure property rights related to crypto assets are clear and enforceable.
In the third category, the commission said, “The draft Bill makes clear that a thing is not prevented from being the object of personal property rights merely because it is neither a thing in action nor a thing in possession.
This reflects the trajectory of recent case law but removes the lingering uncertainty that remains in the absence of a definitive statement from the appellate courts.”
Today we have published a supplemental report and draft Bill on Digital assets as personal property. Find out more here: https://t.co/XQ39tQfWCW
— Law Commission (@Law_Commission) July 30, 2024
The draft bill leaves it to the courts to develop the third category for crypto assets. It could be amended in the future without disturbing the legal proceedings of the other personal property categories.
In a positive step forward, the Law Commission said in a follow-up post on its X account that “this recommendation and the draft legislation, along with the other recommendations made in our June 2023 report, are now being considered by the Government.”
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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