Digital Assets - The Limits of the Concept of Possession

The Financial Law Committee of the CLLS (with members also drawn from the Regulatory Law Committee) has formed a working group (the Working Group) to consider and respond to the Law Commission's "Digital assets: Call for Evidence" (the CE) and Consultation Paper on "Digital assets: electronic trade documents" (the CP). The CE and CP together form the Law Commission's current project on digital assets, including cryptoassets.

For the reasons we explore in greater detail in our response below, the Working Group considers that caution should be exercised in relation to any proposal for legislative reform to extend the application of the "possession" concept – at least to areas beyond those industry sectors where, arguably, it may serve an appropriate and helpful purpose in supporting the safe, efficient and effective holding and transfer of value or rights constituted or evidenced exclusively in digital form.