Issue link: https://digital.shearman.com/i/1479657
The U.K. Jurisdiction Taskforce (UKJT) is one of the six taskforces of the Law Tech Delivery Panel, and its objective is to demonstrate that English law and the jurisdiction of England and Wales together provide a state-of-the-art foundation for the development of DLT, smart contracts and associated technologies. In the United States, at the federal level, most of the focus on cryptocurrencies has been at the administrative agency level, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Internal Revenue Service (IRS), and others. In November 2019 the UKJT provided guidance (UKJT Statement) which, among other things, identified cryptocurrencies (the best-known category of cryptoassets) as possessing the below characteristics. Cryptoassets & Insolvency 7 RULED BY CONSENSUS The rules governing dealings in a cryptoasset network are often established by the practice and consensus of participants rather than by contract or another legally binding way. Those rules are self-enforcing because only transactions made in compliance with them and duly entered in the ledger will be accepted by participants as valid. 05 Typically represented by a pair of data parameters (identifiers or keys). The public parameter is disclosed to all the participants in the particular cryptoasset system (or even to the world at large) and contains encoded information about the asset. The private parameter (or "key") allows dealings in the cryptoasset to be cryptographically authenticated by a digital signature and is available only to person(s) entitled to the key. Knowledge of the private key confers control over the asset. Some complex cryptoassets might have multiple private keys with control over the asset shared among the key holders. INTANGIBLE 01 A process which guarantees the security of a transaction and the participants, independence of operations from a central authority, and protection from double-spending. 02 AUTHENTICATED BY CRYPTOGRAPHY Dealings in cryptoassets are recorded via a digital ledger to keep a reliable history of transactions. The most common form of DLT, Blockchain, comprises blocks of transactions linked together sequentially and was originally invented to support Bitcoin. BASED ON A DISTRIBUTED LEDGER TECHNOLOGY 03 Unlike traditional currencies, cryptocurrencies and other cryptoassets are not controlled by a centralized authority, such as a government or central bank. Instead, the task of managing and maintaining the value of the cryptocurrency is decentralized via a peer-to-peer network, in which no centralized intermediary is required for clearance. DECENTRALIZED 04 Key Features