Legal and Regulatory Considerations for Digital Assets

Jason G. Allen, Michel Rauchs, Apolline Blandin, Keith Bear

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The report examines legal and regulatory challenges arising from the emergence of digital assets. The aim is to frame future legal and regulatory discussions around digital assets, as well as to identify general trends and concepts across jurisdictions rather than to provide granular analysis of any given jurisdiction’s legal position.

Highlights from the report

  • Existing taxonomies of digital assets developed by national and international authorities have failed to fully capture the relevant features of digital assets and the true novelty introduced by cryptoassets. Regulatory authorities should focus on the substance of the underlying asset and the rights associated with it, rather than its form, unless the form changes the substantive nature of the asset.
  • Digital assets, for the most part, pertain to existing and well-known legal concepts: they effectively represent a set of rights embodied in a new digital form. Consequently, the regulatory perimeter for regulating digital assets and associated activities should be determined by identifying the legal concept(s) behind a given digital asset.
  • However, digital assets may warrant adjustment or revisions to existing legislation, in particular whether digital assets are fitting objects of property rights. Generally, further clarification may be needed from national legislatures on the legal recognition of purely digital objects to understand whether (and how) dealing with a digital token has legal consequences for real world rights. In particular whether intangible, digital representation can be recognised as an object of property rights.