England’s Law Commission, an independent body that gives advice to the government on legal reforms in England and Wales, has published a draft bill that would recognize crypto assets as property. It intends to bring more certainty and clarity to the growing digital currencies market and its users.
According to the Law Commission, crypto assets like tokens and non-fungible tokens (NFTs) are not classified as personal property, which is either physical or rights-based. This poses legal problems and dangers to people who own crypto in instances of insolvency, theft, or fraud.
“Personal property rights are important for many reasons, including in the event of insolvency or where assets are interfered with or unlawfully taken, […] However, because digital assets differ significantly from physical assets, and from rights-based assets like debts and financial securities, they do not fit within traditional categories of personal property, the commission said on Thursday.
The draft bill suggests a new kind of property known as “digital assets,” which will encompass crypto assets among other non-physical assets that are registered, traded, or kept on electronic devices. The bill would also define the key features, legal effects, and rights over digital assets, including ownership and transferability, security, and enforcement.
The Law Commission hopes that a clear and consistent legal framework will be provided by the draft bill for crypto assets which would be beneficial for both the industry and consumers. The commission also believes that this proposal would improve the UK’s reputation as a leading jurisdiction for crypto innovation and adoption.
Law Commission Seeks Feedback On Crypto Legislation
The Law Commission has invited the public and stakeholders to share their views and feedback on the draft bill by March 22, 2024. According to the commission, it invites comments from everyone with any interest or expertise in crypto assets, such as lawyers, scholars, supervisors, programmers, shareholders, customers, and service providers.
The draft bill is among several initiatives within the broader digital assets project of the Law Commission that encompasses electronic trade documents and private international law issues. The commission has also called for evidence to support this project before May 16, 2024.
The Law Commission said it aims to publish a final report and a revised draft bill by December 2024 for submission to the government. The commission added that this draft bill was not a government policy or assurance of forthcoming legislation but an advice for change resulting from their research and analysis.
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