Lawyers welcome UK legal statement on the status of cryptoassets and smart contracts given by the chancellor of the High Court Sir Geoffrey Vos.
The Chancellor of the High Court and Chair of the UK Jurisdiction Taskforce, Sir Geoffrey Vos, launched the LawTech Delivery Panel’s statement on cryptoassets and smart contracts at the Guildhall in London.
Speaking at the launch, the chancellor called the statement “a watershed for English law and the UK’s jurisdictions. Our statement on the legal status of cryptoassets and smart contracts is something that no other jurisdiction has attempted.” He explained, “The objective, of course, is to provide much needed market confidence and a degree of legal certainty as regards English common law in an area that is critical to the successful development and use of cryptoassets and smart contracts in the global financial services industry and beyond.” The UK Jurisdiction Taskforce said that crypto assets “have all the indicia of property.” Responding to the news Chris Bushell, a partner in Herbert Smith Freehills' disputes practice, commented “The legal status of crypto assets is a particularly important question in the context of litigation. Can cryptocurrencies be subject to a proprietary injunction? Can the court order payment of damages in cryptocurrencies? While the UKJT statement does not address these questions directly, the clarification that crypto assets are to be treated in principle as property does take us one step further along in the legal analysis. Although the statement does not have legal status, it will no doubt be used by litigating parties on one side of these argument or the other in due course.”
Dorothy Livingston, a consultant within HSF’s competition practice and chairman of the City of London Law Society Financial Law Committee, which made a submission on the legal issues surrounding crypto assets to the task force, said “Greater clarity on the status of cryptoassets under English law is badly needed. This statement provides helpful guidance for parties investing in cryptoassets and should enable better assessment of the legal and practical risks associated with these investments. That being said, there are a number of complex legal questions which have not been addressed which will ultimately need a response from the English courts or legislature.” Michael Voisin, global head of capital markets at Linklaters, commented “This is a very welcome and positive development for the industry and provides market participants with a firm legal foundation to deploy distributed ledger technology and smart contracts to drive further innovation and efficiencies in the financial and other markets.” Richard Hay, UK head of fintech at Linklaters, commented “The legal statement marks an important milestone for the future of blockchain investment and adoption. With clarity on the legal standing of cryptoassets and smart contracts, businesses - particularly at an enterprise level – can feel more confident in embracing their potential in transforming financial markets and driving efficiencies” The chancellor’s statement can be found here, and the full Legal Statement is available here.