Has the Law Commission got it wrong regarding a ‘new, third type of property asset’? Written by Dr. Stephen Castell, founder of e-Expert Witness.com

Source: Law Commission.gov.uk

My analysis is that, yes, the Law Commission (LC), in its final report on Digital Assets of 28 June 2023, which includes the LC’s law reform recommendations to HM Government, has indeed got it wrong. There is good stuff in the LC’s report, but the part that it has got worryingly and fundamentally wrong concerns the apparent legal issue that ‘digital assets’ and, in particular ‘crypto assets’, do not readily fall legally within the two established forms of ‘property’ - what lawyers term choses in possession or choses in action. The LC has chosen to address this perceived legal lacuna by recommending invention of a new, third type of property status, specifically for digital and crypto assets. In my analysis this was and is not only unnecessary and misguided, but is scientifically unfounded and incorrect, and is therefore likely to be dangerously unworkable. The perceived issue of ‘not falling within choses in possession or choses in action’ is a legal ‘ange…