The Law Commission of England and Wales’ consultation paper unveils a proposal to place cryptocurrencies and non-fungible tokens (NFTs) under the U.K. property laws. The U.K. government looks to establish a regulatory framework for cryptocurrencies, which is lacking at present.
The development of a “robust” legal foundation in a “conducive” environment suitable for crypto stakeholders is on the Commission’s agenda.
“Because they are not tangible, digital assets have many different features to traditional physical assets. Their unique qualities mean that many digital assets do not fit easily into current private property law categories or definitions,” the Commission states.
The Commission also defines digital assets as personal property—”data objects”. The commission clarifies the distinct meaning of the term ”data objects” for crypto, to not mean physical assets in possession (gold) or in action (company shares). By doing so, the Commission looks forward to inculcating the “unique features” of crypto in its definition.
The Commission permits crypto investors to seek damage reimbursement against hacks or scams via legal action. The agency intends to safeguard investors from system failures and hacks.
“The Commission’s proposals aim to deliver wider recognition and legal protections for digital assets, allowing a more diverse range of people, groups and companies to interact online and benefit from them,” says the Commission.
“The reforms also aim to help to achieve the Government’s stated goal of the jurisdiction of England and Wales becoming a global hub for digital assets, and in particular, for crypto-tokens and crypto-token systems,” the Commission clarifies.
It’s attributing much importance to the growing significance of cryptocurrencies and its varied utilities. The Commission addressed laws pertaining to digital assets in the private law and private property law covered in the consultation paper.