A new kind of thing - the legal status of digital assets
In response to The Law Commission’s digital assets report in June 2023 the government has introduced the Property (Digital Assets etc) Bill into the House of Lords under the special parliamentary procedure for Law Commission bills.The Bill enacts the recommendations of the Law Commission of England and Wales report that concluded that certain digital assets, including crypto-tokens and non-fungible tokens (NFTs), are capable of attracting personal property rights.
Objects of personal property rights: A thing (including a thing that is digital or electronic in nature) is not prevented from being the object of personal property rights merely because it is neither — (a) a thing in possession, nor (b) a thing in action.
The aim of this bill is to afford legal protection to the owners of digital assets particularly in relation to disputes, action in relation to fraud or theft, action such as injunctions, and the ability to include digital assets in bankruptcy and insolvency procedures. It creates a third definition of thing as in “thing (including a thing that is digital or electronic in nature)” (e.g an NFT or crypto token ) that will join the first two definitions, being a ‘thing in possession’ (e.g. a car) and a ‘thing in action’ (e.g. a debt).
There is no precise definition of “a thing that is digital or electronic in nature” included at the recommendation of The Law Commission in a deliberate attempt to allow the law to keep up with technological and digital advances and means that the definition is not limited to digital assets.
Other recommendations from the report are still being considered. The UK Jurisdiction Taskforce (UKJT), an expert group chaired by the Master of the Rolls that produces non-binding guidance on areas of legal uncertainty, has been asked by the Ministry of Justice to set up an expert group who can provide guidance on technical and legal issues relating to digital assets.
Posted on 10/01/2024 by Ortolan
