The UK Law Commission has called upon legislators to provide further property rules over cryptocurrencies and NFTs in a bid to strengthen the UK’s efforts to become a global digital asset hub.
The law reviewing body believes that reforms will lead to better security surrounding crypto and NFTs within the country, as investors will be better protected from losses due to fraud, hacks or scams through legal action.
UK lawmakers have been making strides in its bid to form a defined crypto regulatory framework after last week, the UK Treasury proposed the country’s first crypto asset bill contained within the UK Market bill.
This bill would introduce a gateway for stablecoins to become fully regulated and the government intends on discussing crypto as an investment asset in the coming months.
Commercial and Common Law Commissioner, Sarah Green, told CoinDesk the importance of security when it pertains to crypto and NFTs.
She stated: “A lot of people just invest in NFTs, but they don’t ask the question, ‘what happens when things go wrong?’. It’s not clear at all what happens if you hack into my wallet and take my bitcoin or if this system fails and I can’t access my bitcoin.”
The law legislating bodies consultation paper doesn’t address questions of cryptocurrencies handled or used as a form of payment. It does however, focus on the trading aspect of crypto, used as a means of investment.
The consultation paper reiterates that the country’s existing property laws are outdated and do not accommodate the emerging new security measures introduced by digital assets which are identified by the commission as ‘unique qualities’.
A commission spokesperson commented: “The law must therefore go further to acknowledge these unique features, which in turn would provide a strong legal foundation for the digital assets industry and for users.
The commission is proposing a new category to better define digital assets as “data objects”. This will entail any form of digital asset in an electronic format – such as databases, digital records, crypto, etc, will help form a better understanding and meaning for lawmakers.
The consultation of the proposed new rules is expected to end 4 November, ending a year long effort by the commission.
