UK Legal Body Submits Crypto Asset Classification Bill

The Law Commission of England and Wales has proposed a groundbreaking classification for cryptocurrencies and other digital assets. The independent body, tasked with reviewing and recommending law reforms, has submitted a report to the UK government urging the creation of a new category of personal property specifically for crypto assets.

UK Regulatory Bodies’ Approach to Crypto Assets

The Law Commission of England and Wales has submitted a groundbreaking proposal to the government, urging the creation of a new category of personal property specifically for crypto assets. This recommendation comes as part of the Commission’s final report on digital assets, published on July 30.

In its report, the Law Commission highlighted the inadequacies of the current system, which categorizes personal property into only two types: things in possession (tangible property) and things in action (intangible property, such as debts or rights). The Commission argued that digital assets, including cryptocurrencies and non-fungible tokens (NFTs), often possess qualities of both categories, leading to complications in legal proceedings and dispute resolution

To address this issue, the Commission has proposed the establishment of a “third category” of personal property. This new classification aims to ensure that property rights related to digital assets are clearly defined and enforceable. The Commission believes that this change will better accommodate and protect the unique of digital assets.

Accompanying the proposal is a draft bill that calls for the separate categorization of crypto assets. This legislation is intended to create a robust legal framework that will support the growth of the digital assets sector in England and Wales. The draft bill allows courts to develop the specifics of this third category, providing flexibility for future amendments without disrupting legal proceedings for other forms of personal property.

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