On 28 July 2022 the Law Commission of England and Wales published new proposals to reform the law relating to digital assets.
The Law Commission has identified several areas that call for law reform, to protect the rights of users and maximise the potential of digital assets. For example, the intangible nature and decentralised nature of digital assets mean that some digital assets do not fit into the current private property law neatly.
Proposals set out by the Law Commission include:
- creating a distinct category of personal property called “data objects”, to better accommodate the unique features of digital assets.
- clarifying the law around ownership and control of digital assets. The provisional conclusion is that the factual concept of control (rather than possession) best describes the relationship between data objects and persons.
- clarifying the law around transfers and transactions involving digital assets, as the existing methods of creating new legal interests may not be appropriate for digital assets.
So what’s next? It is no secret that the UK government and industry are ambitious in the digital asset space and the proposed changes have the potential to facilitate the wider adoption of digital assets.