Digital Assets and English Insolvency Law

23 April, 2024

On 17 April 2024 the UK Jurisdiction Taskforce (UKJT) of LawtechUK published a comprehensive Legal Statement on Digital Assets and English Insolvency Law, which can be accessed here. The Legal Statement is a significant development in the field of cryptocurrency, related digital trading technology and insolvency law.

Alexander Riddiford acted as a member of the drafting team for the Legal Statement, with Lawrence Akka KC – Twenty Essex, David Quest KC – 3 Verulam Buildings, Rory Conway – Linklaters, Ryan Perkins – South Square, Hannah Crawford – Kirkland & Ellis, Matthew Kimber – Matter Labs.

The UKJT is one of six taskforces created by the LawTech Delivery Panel, a body established by the UK Government, the Judiciary and the Law Society in order to promote the use of technology in the UK’s legal sector.

The UKJT’s first Legal Statement, on the status of cryptoassets and smart contracts under English law, was published in 2019. This latest Legal Statement, with a foreword from the Master of the Rolls, considers the existing framework of English insolvency law and, whilst not binding, provides influential guidance on the areas of law it covers and constitutions a significant step towards legal clarity. The legal topics covered include the question of insolvency jurisdiction and COMI in the context of debtors dealing in with digital assets, the nature of digital assets as property for the purposes of the Insolvency Act 1986 and the retention of proprietary rights to digital assets by insolvency estates.