A new proposal is seeking to bring the British legal system into the crypto age as they are given powers to award damages in the world’s most popular (and valuable) cryptocurrency, Bitcoin.

The proposal has been brough forward by the Law Commission to the UK Government, claiming that the law must be amended to accomodate a new category of property to cover crypto assets such as digital currencies and non-fungible tokens (NFTs).

In a statement, the Law Commission said: “Their unique qualities mean that many digital assets do not fit easily into current private property law categories or definitions.”

To create clarification within the legal attritbution of items like this, lawyers have proposed the creation of a new type of legal property known as “data objects,” with judges being able to award damages in these tokens – meaning winning plaintiffs could be paid in Bitcoin or Ethereum.

Cryptocurrency is still very much in the burgeoning stages, with the proliferation of the tech progressing much faster than many of legal and regulatory frameworks required to take it out of its ‘wild west’ phase.

Professor Sarah Green, a Law Commissioner, said NFTs and other crypto tokens “have evolved and proliferated at great speed, so it’s vital that our laws are adaptable enough to be able to accommodate them”.

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HMRC’s Cryptoassets Manual, used by tax collectors, says buying and selling crypto assets can create a capital gains tax liability. Police forces have long dealt with cryptocurrencies under criminal property seizure and forfeiture laws.

Senior judge Sir Geoffrey Vos, the judiciary’s head of civil justice, said in February that he hoped English law “will prove to be the [international] law of choice for borderless blockchain technology”.

A Government spokesman said: “The Government will carefully consider any recommendations the Law Commission makes following this consultation.”

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