England Law Commission recommends reforming property laws for digital assets
The Legal Commission for England and Wales has proposed reforming existing laws, especially private property laws, to protect cryptocurrency users and maximize the potential of the technology.
Suggestions are set out in a consultation paper. It was published We are soliciting input from industry insiders through July 28th and November 4th.
While the law in England and Wales is “sufficiently flexible” for digital assets, there are some key areas that need reform, according to the Law Commission. The Commission argues that personal property laws should apply to digital assets.
In its advisory, the Legal Commission proposes creating a new and distinct category of personal property for so-called “data objects.” This includes not only cryptocurrencies, but also non-fungible tokens (NFTs).
In press release, the Commission said the characteristics of digital assets differ significantly from those of traditional physical assets. Therefore, to ensure that private property laws are effectively applied to digital assets, the authorities have proposed classifying them into a new category.
The Law Commission said creating a new category of assets would provide a “strong legal foundation for the digital asset industry and users.” He added that the proposal is designed to ensure the law remains “dynamic, competitive and flexible”.
Once the reforms are implemented, it will be easier for courts to determine ownership claims over tokens.
In a consultation document, the Legal Commission said there were arguments in favor of courts awarding damages in cryptocurrencies. However, the committee did not formally recommend it.
Professor Sarah Greene of the Commercial and Common Law Commission, said:
Our proposal aims to provide more consistency and user protection, and to create a strong legal framework that fosters an environment that can foster further innovation.
“It is important to focus on developing the right legal underpinnings to support these new technologies, rather than hastily imposing structures that could stifle development.
