As a result of a recently proposed law in the UK , cryptocurrencies will be officially recognized as a new form of ownership, providing greater legal credibility to digital assets as a whole.
On Thursday, the Law Commission of England launched a consultation on the proposed legislation, which aims to clarify “the position to which the courts are increasingly moving.”
The commission stated: “We conclude that the flexibility of common law allows for the recognition of a distinct category of personal property that can better recognize, accommodate and protect the unique characteristics of certain digital assets (including cryptocurrencies and cryptoassets).”
The proposal is a follow-up to the statutory body’s report on digital assets published in July 2023, which recommended legislative changes that would remove any legal uncertainty regarding digital assets.
If passed, the law would help enforce property rights around cryptocurrencies in previously legal gray areas.
For example, in the case of a dispute over digital assets, the court can issue an order freezing the assets, a measure available only for traditional forms of ownership.
The Commission explained: “If someone’s digital assets are taken from them or destroyed, the remedies available to them will be much stronger if the assets are recognized as property than if the law does not recognize any property rights to them.”
In English, there are two types of property rights: “things in possession,” which include tangible things, and “things in action,” which include rights or claims enforceable by action.
Recent court cases involving crypto tokens have sparked interest, despite the fact that legal precedent has typically been used to enforce only these two types of property rights.
The commission said it would not cover certain “non-competitive” items, such as digital files, email accounts and certain gaming assets, although the new category still has no specific restrictions.
Some companies in the sector said the UK complies with cryptocurrency regulations more than the United States.
