Cryptoassets, DLT and smart contracts – UK Jurisdiction Taskforce consultation. Questions to be addressed in the Legal Statement

Cryptoassets, DLT and smart contracts – UK Jurisdiction Taskforce consultation, Annex 1. May 9 2019, https://www.lawsociety.org.uk/news/documents/ukjt-consultation-cryptoassets-smart-contracts-may-2019/

Annex 1
Questions to be addressed in the Legal Statement

Each of the following questions is posed as a matter of English law.

1 Legal status of cryptoassets

1.1 Principal question
Under what circumstances, if any, would the following be characterised as personal property:
1.1.1 a cryptoasset; and
1.1.2 a private key 10?


1.2 Ancillary questions

General law
1.2.1 If a cryptoasset is capable of being property:
(i) is that as a chose in possession, a chose in action or another form of personal property?
(ii) how is title to that property capable of being transferred?
1.2.2 Is a cryptoasset capable of being the object of a bailment?
1.2.3 What factors would be relevant in determining whether English law governs the proprietary aspects of dealings in cryptoassets?

Security
1.2.4 Can security validly be granted over a cryptoasset and, if so, how?
1.2.5 If so, what forms of security may validly be granted over a cryptoasset?

Insolvency
1.2.6 Can a cryptoasset be characterised as “property” for the purposes of the Insolvency Act 1986?

Transferability and negotiability

Under what circumstances, if any, would a cryptoasset be characterised as:
1.2.7 a documentary intangible;
1.2.8 a document of title;
1.2.9 negotiable 11; or
1.2.10 an “instrument” under the Bills of Exchange Act 1882?
                                                
Goods
1.2.11 Can cryptoassets be characterised as “goods” under the Sale of Goods Act 1979?

Register
1.2.12 In what circumstances is a distributed ledger capable of amounting to a register for the purposes of evidencing, constituting and transferring title to assets?


2 Enforceability of smart contracts

2.1 Principal question
In what circumstances is a smart contract capable of giving rise to binding legal obligations, enforceable in accordance with its terms (a “smart legal contract”)?

2.2 Ancillary questions
2.2.1 How would an English court apply general principles of contractual interpretation to a smart contract written wholly or in part in computer code?
2.2.2 Under what circumstances would an English court look beyond the mere outcome of the running of any computer code that is or is part of a smart contract in determining the agreement between the parties?
2.2.3 Is a smart contract between anonymous or pseudo-anonymous parties capable of giving rise to binding legal obligations?
2.2.4 Could a statutory signature requirement 12 be met by using a private key?
2.2.5 Could a statutory “in writing” requirement be met in the case of a smart contract composed partly or wholly of computer code?


Notes
10  To the extent it is considered as distinct from the relevant “cryptoasset”.
11  In the sense that a transferee may, by its mere transfer, acquire better title than that of its transferor.
12  For example, in the context of a disposition of an equitable interest (under s53(1)(c) Law of Property Act 1925 (LPA)) or of a legal assignment (under s136(1) LPA)?