New UK Bill to Give Crypto Owners Legal Protection

The UK government recently introduced a new bill regarding the legal status of digital assets.

Key Takeaways

➔ Bill proposed to give legal protection to owners of digital assets.

➔ The bill also aims to bring digital assets under personal property laws.

On 11 September, the Labour government in the United Kingdom introduced a new bill to the Parliament that deals with the legal status of digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and carbon credits.

Titled the Property (Digital Assets etc) Bill, it aims to give the owners of virtual assets a sense of legal protection. It will also decide if these digital assets can be considered personal property under the law. It will ensure that whenever there is an ownership dispute, there is clarity about digital assets, too. In addition, it will give legal protection to crypto owners in case they become victims of scams or fraud. Justice Minister Heidi Alexander said,

“It is essential that the law keeps pace with evolving technologies and this legislation will mean that the sector can maintain its position as a global leader in crypto assets and bring clarity to complex property cases.”

As of now, there are two categories of properties as per law in the UK:

• Things in possession: Items such as money and cars.

• Things in action: Items such as debt and shares.

The new bill introduces a new category of “thing” that will cover digital assets, which will be recognised under personal property rights.  

Recommended Read: Investing in NFTs: A Detailed Guide 

In February this year, the Law Commission initiated a consultation on draft legislation to designate digital assets as property. In June, the Commission published its final report, concluding that treating certain digital assets, including crypto tokens, as things to which personal property rights can relate is practical and effective. 

The report also outlined the tripartite approach the authorities are recommended to take:

• Common Law Development: Any reform to include digital assets as property should take place through common law development only, as the common law of England and Wales is sufficient to deal with digital assets.

• Targeted Statutory Law Reform: In case common law development isn’t realistically possible, targeted statutory law reform should be helpful.

• Industry Guidance: Authorities should seek guidance from experts from the digital assets industry.

The latest bill, if approved by both the Houses of Parliament and granted Royal Assent, will become a law in the future. The UK is among the leading nations pushing for the regulation of digital assets in its jurisdiction and becoming a crypto hub.