In this edition of her column, Lucy considers the legal
statement on the status of cryptoassets and smart contracts
published by the UK Jurisdiction Taskforce.
UK Jurisdiction Taskforce legal statement on status of cryptoassets and smart contracts
The key findings of the legal statement on the status of cryptoassets and smart contracts published by the UK Jurisdiction Taskforce ("UKJT") earlier this month are that cryptoassets are in principle to be treated as property and that smart contracts can be interpreted using ordinary established legal principles. The legal statement carries no legal weight but is likely to inform legal arguments and judgments.
The conclusion that a cryptoasset is capable of being property matters because proprietary rights are recognised against the whole world and are of particular importance in scenarios involving insolvency, loss, fraud and theft. Proprietary rights are also relevant to the questions of whether there can be a security interest in a cryptoasset and whether a cryptoasset can be held on trust. From a financial services practitioner's perspective, however, the key findings from a day-to-day cryptoasset context relate to the legal statement's analysis around blockchain transactions and the status of private keys.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.