The Law Commission's latest report provides fundamental support to the emerging legal framework for digital assets under English law. The Commission has also proposed small but important areas for statutory reform. If the recommendations are adopted, it will reinforce the benefits of using English law for digital assets transactions even further.
This is the first in a series of articles where we address different aspects of the Report, with a focus on issues that affect both traditional finance and digital market participants.
The latest report from the influential Law Commission of England and Wales describes digital assets as "fundamental to modern society". This is the latest, and most far reaching report in a series from the Law Commission addressing critical legal issues for emerging technologies.
The Report makes a number of recommendations for the reform of English law relating to digital assets, with a focus on using the existing flexibility of the English common law system to provide much needed clarity and consistency of outcomes.
While the Report notes the breadth of what can be called a "digital asset", the proposals largely focus on digital assets giving rise to personal property rights, such as cryptoasset payment tokens, digital assets used for investment or trading, or those embodying debt and equity securities.
Importantly, as digital assets are not tangible and differ in some material respects from physical assets, the Report concludes that digital assets need to be clearly defined in English law as a third category of personal property.
Here are 4 key findings and recommendations from the Report
Key Outstanding Issues