Digital assets: Call for Evidence and Draft Legislation

The Law Commission is today launching a call for evidence to inform their project on private international law in the context of digital assets and electronic trade documents. We are separately seeking views on draft legislation following our report on digital assets in June 2023.

Digital assets and ETDs in private international law

In our call for evidence, we aim to gain a better understanding of the most challenging and prevalent issues that digitisation, the internet, and distributed ledger technologies pose for private international law.

When parties to a private law dispute are based in different countries, or the facts and issues giving rise to the dispute cross national borders, questions of private international law arise: in which country’s courts should the parties litigate their dispute, and which country’s law should be applied to resolve it?

The project has a particular focus on crypto-tokens and electronic trade documents. This is because these assets are prevalent in market practice, whilst also posing novel theoretical challenges to the traditional methods of private international law. Further details on the project and how to respond are available here. The deadline for responses is 16 May 2024.

Digital assets and personal property rights

We are also launching a short consultation exercise on draft legislation to confirm the existence of a third category of personal property into which crypto-tokens and other assets could fall.

Our report in June concluded that certain digital assets, including crypto-tokens and non-fungible tokens (NFTs), are capable of attracting personal property rights. However, because digital assets differ significantly from physical assets, and from rights-based assets like debts and financial securities, they do not fit within traditional categories of personal property. We recommended that legislation should confirm the existence of a “third” category of personal property.

We have now prepared draft legislation to reflect this recommendation and are seeking views on the draft clauses as to their potential impact. Further details and how to respond are available here. The deadline for responses is 22 March 2024.