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An Australian court has held that bitcoin is personal property, in a way that highlights our concern that the Law Commission's Property (Digital Assets etc) Bill (the Bill), presently going through Parliament, will create an unhelpful "fork" in the international legal treatment of cryptoassets.
In October 2022, we issued our briefing Strengthening the Financial Promotion Rules | Travers Smith, discussing the FCA's new rules on financial promotions, with a particular focus on the promotion of higher risk investments to retail investors. The FCA indicated at the time that such a category would include cryptoassets; however, at that point the legislation extending the FCA's remit to those financial promotions was not in force.
Trust has been a key theme that has emerged in crypto in 2022. Going back to the original Bitcoin "White Paper"1, the very stated purpose of crypto and blockchain technology was to transcend a "trust based model" of the traditional financial system to enable payments – and later, with the development of smart contract platforms such as Ethereum, more complex transactions – to be entered into and executed without reliance on trust in counterparties and intermediaries, those being replaced by code and distributed consensus.
In this podcast Jonathan Gilmour, Peter Hughes, John Lee and Adam Schnider consider the implications of the recent collapse of cryptocurrency exchange FTX. They discuss some of the key issues that could arise from the insolvency of FTX or other crypto investment firms more generally, including priority of claims, proprietary rights in crypto-assets, tracing and recovery of crypto-assets, and cross-border insolvency issues.
Partner John Lee has been featured in the Butterworths Journal of International Banking and Financial Law for his article titled, 'The endgame: issues in enforcement against cryptoassets' which considers methods of enforcement against cryptoassets, including the possibility of recovering cryptoassets without the authorisation of the private key.