The Law Society’s UK Jurisdiction Taskforce (UKJT) has published a legal statement on the status of cryptoassets, distributed ledger technology and smart contracts. The aim of the statement is to provide a degree of legal certainty and market confidence to an area that is becoming more and more prevalent in the global financial services industry and beyond.
In essence the Statement addressed two principal questions, namely (i) whether English law would treat a cryptoassets as ‘property’ and (ii) whether and in what circumstances can a ‘smart contract’ give rise to binding legal obligations, enforceable in accordance with its terms.
As regards the status of cryptoassets, the Statement concludes that, in general terms, cryptoassets have all the legal indicia of property and are to be treated as such as a matter of English law. This conclusion is very important and will have consequences to insolvency, succession, breach of trust, fraud or theft claims where cryptoassets are involved.
As regards smart contracts, the Statement finds that smart contracts are capable of satisfying the basic requirements of an English law legal contract. Whether those requirements are in fact met will depend on the factual circumstances of the smart contract including the parties’ words or conduct, as is the case with any other contract.
A link to the statement can be found here https://technation.io/about-us/lawtech-panel/