The UK Jurisdiction Taskforce, a group set up by the industry-led LawTech Delivery Panel, has published the results of a public consultation and legal study that considered several key questions for determining the legal position of cryptoassets and smart contracts.
The principal questions considered were:
- under what circumstances, if any, would the following be characterised as personal property:
- a cryptoasset; and
- a private key?
- in what circumstances is a smart contract capable of giving rise to binding legal obligations, enforceable in accordance with its terms (a “smart legal contract”)?
Ancillary questions covered matters such as:
- Can security validly be granted over a cryptoasset and, if so, how?
- Can cryptoassets be characterised as “goods” under the Sale of Goods Act 1979?
- Under what circumstances would an English court look beyond the mere outcome of the running of any computer code that is or is part of a smart contract in determining the agreement between the parties?
This confirmation is anticipated to affect the treatment of cryptoassets on insolvency and succession, and in cases of fraud, theft or breach of trust, as well as confirming the enforceability of ‘smart’ contracts under English law.