The UK Jurisdiction Taskforce (UKJT), comprising leading judges, barristers and academics, has provided welcome clarification regarding the ever-evolving rules for safeguarding assets like cryptocurrencies and other digital tokens. In a 64-page statement released this month, three key clarifications were made:
1. Crypto-assets as property
The taskforce confirmed that in legal terms crypto-assets can and should be treated as property. This will be welcomed by businesses in this nascent yet growing market looking to trade crypto-assets in similar ways to other types of property.
2. Smart contracts valid
It was clarified that smart contracts, provided they contain the traditional elements of a contract, will be enforceable under English law.
3. Recognition of private key as a signature
A significant finding for businesses operating under English law was that a wet ink signature is not necessary to validly sign a document. Given the potential for fraudulent copying of a traditional signature, in addition to the opportunity to make automated signing a more efficient and cost-effective option, this may further increase the popularity of blockchain solutions among businesses.
With Singapore changing regulation regarding payment services to refer specifically to crypto-assets, and Abu Dhabi introducing a dedicated digital asset legal regime, the Taskforce’s statement demonstrates the flexibility of English law, and signals that work is underway to ensure the UK adapts effectively to new technologies and their application to financial services.
— The UKJT is one of six taskforces which make up the LawTech Delivery Panel, an industry-led, government-backed initiative tasked with the digital transformation of the UK’s legal industry.
— The full publication of the UKJT’s statement is available for download here.
