The UK government has introduced a draft law that officially recognizes cryptocurrencies and non-fungible tokens (NFTs) as personal property.
This bill, brought to Parliament on September 11, aims to provide legal clarity for digital assets, helping to protect owners and businesses from fraud and scams. It also seeks to assist judges in handling complex cases where digital holdings are part of disputes or settlements, such as in divorce proceedings.
The legislation adds a new “third” category to the existing classifications of personal property, which currently include “things in possession” (physical items like cars) and “things in action” (rights, such as debts). This new category will specifically cover digital assets, recognizing them as property under UK law.
The draft law also proposes creating or appointing a panel of technical experts who specialize in crypto-token markets. These experts would provide non-binding guidance on issues related to digital asset control and other challenges that may arise in the crypto space.
The UK aims to maintain a leadership role in the global crypto industry by being among the first nations to recognize these assets in law. Justice Minister Heidi Alexander emphasized, “It is essential that the law keeps pace with evolving technologies.” The legislation, according to Alexander, will help the UK retain its position as a global leader in cryptoassets while providing much-needed clarity in legal cases involving digital property.
Globally, there has been increased attention on the legal status of NFTs and other digital assets. In the U.S., the Digital Chamber, a blockchain advocacy group, recently called on Congress to classify some NFTs as consumer goods, following the SEC’s enforcement actions. The SEC has recently taken action against OpenSea, claiming that certain NFTs traded on the platform are securities.
The regulatory environment in the U.S. has led some companies and artists to exit the NFT market. In 2023, the SEC fined Impact Theory, a Los Angeles-based media company, $6.1 million for offering unregistered NFT securities known as “Founder’s Keys.”
Following these actions, the NFT market has begun to struggle, experiencing significant declines in value. High-profile NFTs, such as the Bored Ape Yacht Club, have seen their prices plunge by up to 80%.
