Issue link: https://digital.shearman.com/i/1479657
The Law Commission (a statutory independent body that keeps the law of England and Wales under review and recommends reform where it is needed) published a consultation on digital assets in July 2022 (Law Commission Consultation) which draws on the conclusions of the UKJT Statement. The Law Commission Consultation looks at (and makes proposals in relation to) whether, and if so, how, the law of England and Wales should be reformed to cater for cryptoassets. In general, the Law Commission agrees with the UKJT Statement and finds that English law has, to some extent, proven to be sufficiently resilient, flexible and iterative to accommodate cryptoassets as objects of property rights. However, it considers that certain aspects of English law require reform to ensure consistent legal recognition and to acknowledge the nuanced features of cryptoassets. Of particular note, the Law Commission considers that cryptoassets cannot be properly categorized as "things in possession" or "things in action" (the two existing categories of personal property), as they are neither tangible (at least in the ordinary sense), nor are they only claimable or enforceable by legal action or proceedings. Consequently, the Law Commission proposes that digital assets should be categorized as a third category of personal property, known as "data objects." The Law Commission Consultation aligns with international law reform in relation to cryptoassets, including work being carried out by the American Law Institute and Uniform Law Commission's Uniform Commercial Code and Emerging Technologies Committee in the United States, and by the International Institute for the Unification of Private Law (UNIDROIT) Digital Assets Working Group. The Law Commission Consultation closes in November 2022. It will be interesting to see if the proposal to categorize cryptoassets as a separate category of personal property is supported (both in England and Wales and internationally). Cryptoassets & Insolvency 8 LAW COMMISSION CONSULTATION Key Features (cont.)