Other Law Commission recommendations include creating expert panels and implementing a legal framework around crypto collateral arrangements.

Digital assets, such as cryptocurrencies, could be classified under a new category of personal property, the Law Commission of England and Wales said in its final recommendation report to the government.

The Law Commission, comprising lawyers, judges, and professors, set forth four specific recommendations in its report published on June 28, 2023.

These related to legislation for a distinct category of personal property, creating an industry-specific panel, implementing a bespoke legal framework on crypto collateral arrangements, and law reform to clarify these arrangements.

The recommendations

The commission said the current personal property laws are “sufficiently flexible” to encompass cryptocurrencies. However, cryptocurrencies have unique features that set them apart from physical assets, securities, and other forms of property.

Therefore, it noted that a distinct category should be legislated “to better recognize and protect their unique features.” This recommendation was also made in its consultation paper published in 2022.

The Law Commission saw value in creating a panel of experts advising the court on complex legal matters involving cryptocurrencies. The panel should comprise technical experts, legal practitioners, academics, and judges, per the report.

It said the existing laws around using crypto as collateral are “not adequate.” To address these limitations, the U.K. should create a tailored legal structure that “better facilitates the entering into, operation and enforcement of collateral arrangements relating to crypto-tokens and crypto-assets.”

The commission also recommended changes to statutory laws to define if and how certain cryptocurrencies align with the Financial Collateral Arrangement Regulations (FCAR). According to the report, many digital assets are likely to fall outside the scope of FCARs. This action would:

“aim to create a clear and consistent framework for digital assets that will provide greater clarity and security to users and market participants.”

Justice Minister Mike Freer was quoted in the report saying:

“We must ensure our law remains equipped to meet the complexities of these technologies well into the future, and we will carefully consider these findings as we look to further strengthen the future of our globally-renowned legal system.”

The report stating the recommendations would support the government’s crypto hub ambitions.

#uk #cryptocurrency #crypto2023 #googleai

#uk Crypto Regulation :

UK Parliament Approves Crypto Regulation Bill :

The UK Parliament has approved a bill that would regulate stablecoins and all cryptocurrencies. The bill, which was passed by the House of Lords on June 19, 2023, is part of the government's efforts to position the UK as a "global hub for #cryptoassets technology."

The bill would require all cryptoasset firms to be registered with the Financial Conduct Authority (FCA). It would also give the FCA the power to regulate the promotion of cryptocurrencies.

The bill is still subject to Royal Assent, which is the final step in the legislative process. However, it is expected to be signed into law by the Queen in the coming weeks.

The approval of the bill is a major milestone for the crypto industry in the UK. It provides much-needed clarity and certainty for businesses operating in the space. It also sends a signal to the rest of the world that the UK is committed to regulating #cryptocurrencies. in a responsible way.

#opbnb $BTC #zachxbt $ETH

$OP

#uk #taxation #DeFi #staking

The new rules by UK Treasury aim to make it easier for people to pay taxes while making money from DeFi. Officers believe the new regulation will require less effort for people to transfer taxes.

The way people borrow and lend money on DeFi is being discussed. A new set of rules are coming regarding taxes in the UK. However, people in charge of taxes want to hear what others think about this idea.

The government wants to know what people investing in DeFi (a type of digital money) think about how taxes should work. People working in the field can share their views openly to include in the regulation. According to sources, the organization will seek their input by June 22.

If new rules are passed, people can use special online funds to buy things. Furthermore, they will not have to pay additional funds as they usually do.

This consideration is being put up to define certain criteria that are defined as “DeFi transaction.” For example, if someone uses cryptocurrency in a way that is not considered a DeFi transaction, they may be subject to taxes. Therefore, it is important to establish clear guidelines on what constitutes a DeFi transaction to avoid any loopholes regarding tax obligations.

A “DeFi transaction” must entail the transfer of crypto assets from a lender to a borrower or through a smart contract, where the borrower is required to return the tokens.

When someone lends something to someone, he should be able to withdraw as much as he gave. This is the same as if you have lent a toy to a friend, you want him back after finishing playing with him.

The government is trying to make it easier for those who lend and use digital money to pay their taxes. They want to make a plan that is less confusing for all. They can impose a new fee for people using digital money, so it is not very difficult to find out how much tax is outstanding on them.

The UK Treasury statement reads: “…the new tax framework could treat all DeFi returns as being revenue in nature and charged to a new miscellaneous income charge specific for crypto asset transactions.”

The discussion over tax regulation on DeFi staking and lending is part of the second phase of a five-step process. Once the officers finalize the inputs, they will prepare a legislative draft. After that, it will be implemented and monitored, and finally, reviewed and evaluated for the change.

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