On 22 February 2024, the UK’s Law Commission (Commission) published a consultation (Consultation) in relation to its draft Digital Assets Bill (Draft Bill), including two key clauses confirming that digital assets are capable of being recognised as personal property under English law. Separately, the Commission also issued a call for evidence (Call for Evidence) to examine the appropriate courts and law under which parties should litigate when dealing with international digital assets disputes.

Consultation

The Commission, following its June 2023 final report (Final Report) on its recommendations for digital assets reform, has published the Consultation in relation to its Draft Bill to confirm that digital assets (such as crypto-tokens) are capable of being recognised under English law as property. 

The Draft Bill seeks to implement the Commission’s existing work on digital assets by proposing an express statutory provision to confirm the existence in English law of a “third category” of personal property rights, capable of accommodating certain digital assets, including crypto-tokens, i.e., a third category of intangible property. The Draft Bill contains a provision that confirms a “thing” (including a thing that is digital or electronic in nature) is capable of being the object of personal property rights even though it is neither a thing in possession (which are typically tangible, moveable and visible) nor a thing in action (which typically can only be claimed or enforced through legal action or proceedings). The Draft Bill itself is set out in Appendix 1 of the Consultation.

The Consultation closes on 22 March 2024, and responses to it will inform the final version of the Draft Bill. Ultimately, the UK government will decide whether the Draft Bill should be implemented.

Call for Evidence

In the Call for Evidence, the Commission aims to obtain a better understanding of the issues that digitisation, the internet, and distributed ledger technologies pose for private international law. The Call for Evidence is part of the Commission’s project on private international law in the context of digital assets and electronic trade documents (ETDs). 

The Call for Evidence examines the question of “in which country’s courts should the parties litigate their dispute, and which country’s law should be applied to resolve it” when dealing with international digital asset disputes. In particular, the Call for Evidence focuses on crypto-tokens and ETDs. While these assets are prevalent in market practice, they also pose novel theoretical challenges to traditional methods of private international law due in part to the difficulty of ascribing geographical locations to digital actions and digital assets. 

The Call for Evidence closes on 16 May 2024. 

The Consultation and the Call for Evidence are available here and here, respectively.