U.K. Classifies Cryptocurrencies as Property Under English Law
The U.K. is now the latest jurisdiction to classify cryptocurrencies and virtual assets as property. The Times reports that a legal panel chaired by Sir Geoffrey Vos, Chancellor of the High Court reached the decision which presents significant implications for the legality of cryptocurrencies and blockchain assets in the U.K.
Crypto is Similar to Physical Property
According to Law 360, senior judges in the U.K. under the auspices of a special legal panel have ruled that bitcoin (BTC) and other cryptos as property. The ruling declared that cryptocurrencies possessed all the ‘indicia of property.’
The panel’s decision also stated that the unique characteristics of some cryptos — decentralization, consensus mechanisms, etc., does not preclude them from being treated as property in the U.K.
Nuanced Interpretation of Legal Statutes
The panel’s decision also highlights a welcome appreciation of the nuanced considerations required for laws governing crypto and blockchain-based assets. As part of the ruling, the panel recognized private keys as being akin to a signature.
In English law, a valid signature is one that is performed with “wet ink.” Based on this ruling, it appears the highest echelons of the U.K. legal system recognize that digital signatures are analogous to wet ink signatures.
Commenting on the need for a nuanced application of mainstream legal statutes to cryptos, Sir Geoffrey remarked that judges and financial regulators need to establish a distinction between current laws and enacting legislation.
Elsewhere, several stakeholders in places like the U.S. have called on regulators to adopt a more nuanced approach to crypto regulations. The country’s tax agency — the Internal Revenue Service (IRS) declared cryptos to be intangible property for tax purposes.
Clear Path Forward for UK Crypto Regulations?
The panel’s ruling may also set the stage for the emergence of holistic crypto regulations in the U.K. According to the chair of the panel:
“[It is hoped that the legal statement will] go a long way towards providing much-needed market confidence, legal certainty and predictability in areas that are of great importance to the technological and legal communities and to the global financial services industry.”
The U.K. does not have any solid crypto regulations in place aside from tax laws, though the country’s top financial watchdog — the Financial Conduct Authority (FCA), is reportedly looking to ban crypto derivatives.