The UK government introduced new legislation aimed at clarifying the legal status of cryptocurrencies, non-fungible tokens (NFTs), and carbon credits under domestic law, on 12 September 2024. The proposed Property Bill seeks to define these digital assets as “personal property” and create a specific legal category for them.
The legislation proposes the classification of digital assets, such as Bitcoin and NFTs, as “things” under UK property law.
By establishing this new category, the government aims to provide legal protection for owners and businesses dealing with digital assets.
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Will Crypto Regulation Help UK Become Leader In Crypto?
According to Heidi Alexander, Labour MP and Minister of State, the bill is essential to ensuring that the UK remains a global leader in the cryptocurrency sector.
“It is essential that the law keeps pace with evolving technologies, and this legislation will bring clarity to complex property cases,” she said.
In particular, the proposed law is expected to aid judges in handling complicated disputes involving digital assets. It could address situations where digital holdings are disputed in legal proceedings, including cases related to asset division during divorces or other settlements.
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Is This The Beginning Of Global Crypto Regulation?
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The decision to introduce this legislation follows a 2023 report commissioned by the UK Ministry of Justice. The report concluded that some digital assets do not fit traditional definitions of property but are still treated as items to which personal property rights can apply to.
The bill marks one of the Labour government’s early steps in addressing digital asset policies since taking control after the 4 July election. However, due to the upcoming Parliamentary recess and party conferences, there may be a delay before further action is taken.
Meanwhile, the UK’s approach to digital asset regulation could influence international discussions, as the US faces its own regulatory challenges. With the 2024 US election approaching, changes in leadership could impact how digital assets are handled across the Atlantic.
The current leadership of the US Securities and Exchange Commission, under Chair Gary Gensler, has been criticized for enforcing regulations on crypto firms without providing clear guidelines, a situation that could evolve depending on the election’s outcome.
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UK FCA Rejects 90% of Crypto Firms Seeking Registration
As reported, nearly 90% of cryptocurrency firms applying for registration in the United Kingdom over the past year have been turned down by the Financial Conduct Authority (FCA).
The high rejection rate stems from the firms’ failure to meet necessary standards, particularly in areas related to fraud prevention and anti-money laundering protocols. The FCA revealed that only four of the 35 crypto firm applications submitted in the last 12 months were approved.
The UK has increased regulatory scrutiny on the cryptocurrency sector, following several high-profile bankruptcies last year. Last year, the FCA introduced new regulations requiring all crypto firms to register with the financial watchdog.
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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.
