UK Jurisdiction Taskforce Consultation On Cryptoassets, Distributed Ledger Technology And Smart Contracts

The UK Jurisdiction Taskforce (UKJT) recently published a consultation paper requesting submissions from stakeholders working with, or interested in, cryptoassets, distributed ledger technology (DLT) and smart contracts. Submissions will inform a legal statement by UKJT which will aim to settle questions on the legal status of cryptoassets and smart contracts. UKJT is drawn from industry, government and the judiciary and was formed to facilitate the growth of the UK legal sector.

UKJT seeks to clarify whether cryptoassets, DLT and smart contracts are compatible with, and can be relied upon with sufficient legal certainty in, English private law. UKJT's legal statement should also provide clarification on any areas of uncertainty in the interaction of English law with cryptoassets, DLT and smart contracts.

Cryptoassets

The consultation paper identifies the legal uncertainty surrounding the status of cryptoassets as an important area in need of clarification. The consultation paper requests input on when a cryptoasset and a private key should be characterised as personal property. UKJT has limited the scope of its investigation to focus on property law rather than include other areas such as tax or data protection law. This is in order to resolve the central question of whether cryptoassets should be considered personal property in the hope of facilitating the appropriate future development of cryptoassets. The current approach of English property law is not fully compatible with the various understandings of cryptoassets. In particular, English property law has difficulties characterising cryptoassets in terms of whether they may be seen as a physical thing or a right (chattel, chose in action or chose in possession) or as property (whether personal or intellectual), and determining where they are located.

Smart contracts

UKJT is interested in determining the enforceability of smart contracts and the circumstances under which a smart contract is capable of giving rise to binding legal obligations. The consultation paper highlights the need to...