Various proposals are presented as the United Kingdom continues to intensify its attempts to build a cryptocurrency regulatory framework. The region’s Law Commission has produced a consultation document defining crypto ownership to defend user rights.
The consultation document issued on July 28 says that criteria must be established to identify and safeguard cryptocurrencies in a digitised environment while emphasising the significance of digital assets in contemporary society.
The Law Commission. Image: lawcom.gov.uk
In a nutshell, the consultation document describes how U.K. property law applies to cryptocurrencies and how it should apply. The commissioners noted that the intangible nature of digital assets prevents them from being classed as conventional possessions.
Recognising crypto’s unique traits
Law must consider crypto’s distinctive characteristics to create a crypto-friendly atmosphere. Market players perceive some digital assets (including crypto-tokens and crypto assets) as tangible property.
Property rights are essential to contemporary social, economic, and legal institutions and should be recognised and safeguarded. Reforming the legislation to give legal clarity will offer a solid platform for developing and using digital assets.
A portion of the proposals focuses on transferring digital assets, with the commission suggesting that crypto-tokens should be subject to the same norms of title transfer as conventional property. The transfer is supported even if a new or modified crypto token is issued.
U.K.’s push to be a global crypto hub
In addition, the proposed legislation specifies that if an investor purchases a token in good faith, uninformed of any other party’s claim to it, they have the right to maintain possession of the contested token. In addition, the plan demands the clarification of cryptocurrency custody regulations.
The commission stated that its ideas would contribute to the United Kingdom’s objective of becoming a worldwide cryptocurrency centre by creating dynamic, flexible, and competitive regulations.
Professor Sarah Green, Law Commissioner for Commercial and Common Law, said that it’s essential to concentrate on building the proper legal foundations to enable these new technologies rather than rushing to impose structures that might hinder their growth.
The commission has set November 4 as the deadline for receiving comments on the document.
