Clarification of the legal status of Bitcoin and Co. in the UK

In a press release, the UK Ministry of Justice announced that a new bill was introduced in the UK Parliament on September 11, 2024 to clarify the status of Bitcoin and other cryptocurrencies in English and Welsh law and to provide better legal protection for holders of digital assets.

The new bill is a response to a Law Commission report commissioned by the Ministry of Justice in 2023, which elaborated on the recognition of digital assets as property. With the new law, Bitcoin and other digital assets will now be considered personal property for the first time in the history of the United Kingdom and introduced as a third category of assets.

Previously, there were only two categories of property: "things in possession", such as money, gold or cars, and "things in action", such as debts or shares. The new law provides for a third category to cover certain digital assets and the personal property rights of their owners. However, this does not apply to all digital assets, as the term can be extremely broad, but primarily to Bitcoin and other cryptocurrencies, non-fungible tokens (NFTs) or digital carbon credits, according to the press release.

The owners of digital assets were previously in a legal gray area. With the new law, they or companies can benefit from increased legal protection if their assets are affected by fraud or theft. At the same time, the law is also intended to support judges in cases where digital assets are in dispute or form part of settlements.

The legal clarification and recognition of digital assets is hoped by UK Justice Secretary Heidi Alexander to keep the UK at the forefront of the global crypto sector.

It is vital that the law keeps pace with evolving technologies and 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.
_{Heidi Alexander, UK Justice Secretary}

The UK legal services industry in particular, which generates £34 billion a year for the UK, will be strengthened by the new law and become more attractive to further investment and business. It is estimated that 40 percent of global corporate arbitration and £250 billion of mergers and acquisitions are conducted under English law. The update to UK law is designed to keep the UK legal sector competitive or the preferred choice.

Our world-leading legal services are an essential part of our economy, helping to drive growth and keep the UK at the forefront of the international legal industry.
_{Heidi Alexander, UK Justice Secretary}