The UK Jurisdiction Taskforce (a taskforce of the Law Society’s LawTech Delivery Panel) has published a statement on the legal status of cryptoassets and smart contracts, following a public consultation. Its two key findings are set out below, but these have not yet been tested in the English courts and stakeholders are likely to want to see appropriate legislation and regulation brought into force to address these issues.
- Cryptoassets have all the legal characteristics of property and are, as a matter of English legal principle, to be treated as property. This conclusion is likely to have important consequences in areas relating to succession on death, the vesting of property in personal bankruptcy and the rights of liquidators in corporate insolvency.
- Smart contracts are capable of satisfying the requirements of English law contract formation principles and can therefore be interpreted and enforced using ordinary and well-established legal principles. Further, a statutory signature requirement is highly likely to be capable of being met by means of a private key encryption.