Bitcoin and NFTs may receive more legal protection as private property under proposed UK legislation TechCrunch

The UK government has introduced a new bill to Parliament that offers new legal protections for digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and carbon credits.

The bill comes as the crypto sector contends with a series of regulatory violations: In the United States, the Securities and Exchange Commission (SEC) has ruled that certain crypto assets are securities, and earlier this year, The SEC approved the first US-listed exchange. An exchange-traded fund (ETF) to track Bitcoin. The European Union (EU), meanwhile, is also introducing new laws to regulate cryptocurrencies and make transactions easier to trace.

The UK is working on similar rules, but the new property (digital assets etc.) bill is more about legitimizing digital assets as “private property”, bringing them on the same footing as traditional assets.

The proposed legislation comes in response to the Law Commission’s 2023 report which highlighted the need to update current legal provisions on private property rights. The report noted:

As technology advances and people spend more time online, our relationship with digital assets will become even more important… Our recommendations are also to ensure that England and Wales private law for market participants Remains a dynamic, globally competitive and flexible tool. Digital asset space.

Law Commission: Digital Assets – Summary of Final Report

The concept of “personal property” is important in law, as it plays a central role in legal cases related to bankruptcy, bankruptcy, theft, inheritance, divorce proceedings, and more. Currently, the law in England and Wales (Scotland and Northern Ireland have separate legal systems) governs two categories of property: tangible items such as cars, jewellery, and cash known as “possessions”. becomes Separately, “things in action” are all about protecting intangible assets such as stocks, bonds, and intellectual property.

This leaves a huge void for “digital” assets like Bitcoin and similar cryptocurrencies, as well as digital art like NFTs (which have changed hands for a significant amount of money in recent years). This new, third category, if passed into law, will bring more clarity to private property and make it easier for courts to decide on disputes.

For example, a court can issue a freezing order to prevent someone from destroying a digital asset before a dispute is resolved, as the court already does for prohibited products. Or, if someone steals their digital assets as part of a fraud, they can receive huge legal remedies.

Additionally, such a law would mean that digital assets could form part of a person’s estate for inheritance or bankruptcy proceedings.

What’s next?

The bill was first published in draft form in July, but it has now reached the first reading stage in the House of Lords, where it will go through various debates and iterations before progressing to the House of Commons. to pass

There is still some distance to go before the bill becomes law, but the UK currently has a majority Labor government, so there is a good chance it will eventually be passed – in what form and under what conditions, however, is unclear. .

For example, what will count as a “digital asset” under the new law? In theory, this term covers a wide range of things like email accounts and files, carbon credits, and game digital assets. The Law Commission acknowledges this, pointing out that there will likely be “boundary issues” across the spectrum of digital assets. It also suggests a “common law” approach, which states that the law should be tested in a court of law on a case-by-case basis to determine whether, in a particular case, There must be wealth. granted private property rights.

However, the Ministry of Justice and the Law Commission are clear that the “main” digital assets that the law sees to protect are crypto-tokens such as cryptocurrencies and NFTs.