Cryptoassets are now recognisable under English law after a statement by the UK Jurisdiction Taskforce (UKJT), regarded as a big step for integration of crypto trading into mainstream finance.
However at a recent roundtable in London, international law firm Allen & Overy LLP pointed out that some of the areas remain unspecified.
A&O partner Etay Katz highlighted that the statement describes cryptoassets as “capable” of being property, without saying that they unequivocally are. “Without wanting to destroy the amazing value of the statement, it also doesn’t say anything about any specific digital asset.
“It doesn’t touch on regulation, it doesn’t touch on monetary policy, and it doesn’t touch on particular areas that require legislative changes, of which there are quite a few,” Katz said.
Katz’s colleague, A&O senior lawyer Jason Rix, added that legislation of property requires certainty from a jurisdictional point of view to determine what legal system applies.
“In order to work out whether something is property, it has to exist in a legal regime, and you have to know which legal regime it is,” Rix said.
Normally with property, this can be solved quite easily. If there is a dispute over land, for example, the country it is in determines what law applies. If the property is moveable, like transport, this is determined by where it goes.
“It’s very hard to identify where a cryptoasset is when you consider all the parts that make it up,” Rix explained. “This statement has given some indicators of what an English court might look at and decide if a dispute is governed by English law. But that doesn’t say what the French courts are going to say.”
There are systems of place, largely courtesy of the EU, which deal with some aspects of this, but Rix argued that these are already complicated when it comes to traditional assets.
“On a global scale, you need some international thing like the Hague Conference to set up a treaty that everybody would sign up to.”