- The UK’s Property Bill classifies digital assets like Bitcoin and NFTs as personal property.
- FCA’s strict crypto regulations lead to only 4 of 35 firms securing licensing approval.
- New UK law strengthens the legal framework, boosting the £34B legal services industry.
The United Kingdom has introduced new legislation to define the legal status of digital assets. On September 11, 2024, the UK government unveiled the Property Bill to determine whether crypto assets like Bitcoin and non-fungible tokens (NFTs) can be considered personal property under current laws.
Providing Clarity for Digital Assets
The Property Bill establishes a new category of property under UK law, classifying digital assets, including cryptocurrencies and NFTs, as “things.” This classification is anticipated to assist judges in navigating complex cases where digital holdings are in dispute.
The legislation will also protect owners and businesses against fraud and scams, further strengthening the legal framework surrounding digital assets.Labour MP and Minister of State Heidi Alexander emphasized the importance of keeping the law up-to-date with technological advancements. Heidi noted:
This legislation will mean that the sector can maintain its position as a global leader in crypto assets and bring clarity to complex property cases.”
Regulatory Hurdles in the UK Crypto Sector
The UK’s move to clarify the legal status of digital assets comes as the Financial Conduct Authority (FCA) increases its oversight of the crypto industry. Earlier this year, the FCA reported that 87% of cryptocurrency companies applying for licensing under the country’s anti-money laundering regulations were unsuccessful. Only four of the 35 applications received in the year ending March 31 were successful.
These strict regulations have led some crypto firms to leave the UK, citing long wait times and what they perceive as unfair treatment by the FCA. The regulator’s new rules also require clearer marketing practices from crypto firms, including risk warnings and the elimination of promotional incentives like referral bonuses.
Read also: UK Gets Its First Low-Cost Crypto ETPs as WisdomTree Lands FCA Approval
The introduction of the Property Bill is expected to benefit the UK’s legal services industry, which contributes £34 billion annually to the economy. The legislation aligns with the country’s broader goal of ensuring that English law remains the global standard for corporate arbitrations and mergers and acquisitions, sectors valued at £250 billion globally.
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