Owing to the growing importance of digital assets nowadays, at the request of the UK Government, the Law Commission made various recommendations to ensure that English law is able to accommodate digital assets (including crypto-tokens) so that the development of this type of technology would not be limited by legal constraints.
The Law Commission published the final report on 28 June 2023, with a conclusion that the common law system in England and Wales is capable of providing a coherent and globally relevant regime for existing and new types of digital assets. It also set out some recommendations in the final report, such as legislation and establishment of a panel of experts for guidance on technical and legal issues in connection with digital assets.
The full final report can be found here.
Subsequently on 30 July 2024, the Law Commission released a supplemental report and a draft Bill on digital assets as personal property, with a view to implementing its recommendations. In the draft Bill, the existence of a “third category” of personal property rights is confirmed so that various digital assets such as crypto-tokens can be accommodated. Meanwhile, the supplemental report serves as an explanation of the rationale behind the draft Bill and sets out unique features of digital assets that do not belong to the two traditional categories of personal property, namely “things in action” and “things in possession”. Additionally, the supplemental report emphasises that by describing the boundaries of the “third category” of personal property and the rights attached thereto, the draft Bill would leave the further development of the legal nature of such personal property to the courts.
The full supplemental report and draft Bill can be found here.
