DIGITAL ASSETS: NOVEL DISPUTE SOLUTIONS FOR NOVEL TECHNOLOGIES
Markets and uses for digital assets and blockchain technology continue to expand rapidly. While cryptocurrencies, distributed ledger technology and smart contracts have been around for a while, their increasing use and value is bringing them mainstream recognition. Most recently, non-fungible tokens (NFTs) – unique digital assets recorded on a blockchain to certify authenticity – have received significant attention.
Millions have been spent on NFTs, such as NBA Top Shots, Beeple’s artwork and rare CryptoPunks, and artists, musicians, sports teams, clubs and leagues around the world are exploring NFTs as a potential revenue source.
While large sums of money are already being invested in digital assets and new applications of associated technology, the law does not currently provide certainty as to their precise legal status. This article explores: (i) how the UK Jurisdiction Taskforce (UKJT) of the LawTech Delivery Panel and the UK’s Law Commission are working to ensure that digital assets receive consistent legal recognition and protection, and to make English law and jurisdiction an attractive proposition for related transactions and dispute resolution; and (ii) the types of legal disputes which may arise in connection with digital assets.
The UKJT
In 2019, the UKJT issued a consultation paper on the status of cryptoassets, distributed ledger technology and smart contracts in English private law, noting that the flexibility of England’s well-developed common law system is well-placed to adapt to deal with these new technologies and their commercial applications, albeit perceived legal uncertainties might create a lack of confidence among potential investors and participants.
Oct-Dec 2021 issue
K&L Gates LLP