UK Gov’t-Led Jurisdiction Team to Define Status of Crypto Under English Private Law

A British government-led jurisdiction team has launched a public consultation to determine the status of crypto assets under English private law, according to an official statement on May 9.

In the document, the United Kingdom Jurisdiction Taskforce (UKJT) stated that the existing legal uncertainty around the crypto industry is a major reason for a lack of confidence by investors.

The UKJT, one of the six taskforces of the LawTech Delivery Panel (LTDP), brings together the Judiciary and the Law Commission of England and Wales, as well as tech and legal experts. As the document notes, the U.K. Financial Conduct Authority also contributed in the initiative as a technical advisor.

The taskforce highlighted that blockchain-powered smart contracts will “only finally take off when market participants and investors have confidence in them.” The UKJT wrote:

“Mainstream investors still need to be convinced that their legal rights can be protected when they trade in cryptoassets and enter into smart contracts.”

As such, the jurisdiction taskforce started preparing an authoritative legal statement on the status of crypto assets and smart contracts under English private law to identify the key legal questions in the field and to provide a basis for the mainstream utilization.

Once the consultation is closed and analyzed, the UKJT will release a legal statement in late summer. After the statement is published, the authorities will evaluate whether any legislative change is necessary or appropriate.

The taskforce noted that the consultation period will last until June 21, 2019, also inviting the public to an event to discuss the consultation questions on June 4.

On May 9, the United States House of Representatives Financial Services Committee passed a resolution to launch a Task Force on Financial Technology.

Recently, the government of Liechtenstein also passed new regulation on blockchain, tokenization and virtual assets in a move to improve investor protection, combat money laundering and bring more clarity to the sphere.