Laws and regulations for digital assets tend to arrive either too early or too late. Too early when they include details that turn out to be awkward or irrelevant when technology moves in a different direction. Too late when they wait for certainty and meanwhile leave important areas unregulated and vulnerable to fraud.
The English Law Commission, in its final report on digital assets, proposes to solve this riddle with a new approach that might make the U.K. a jurisdiction of choice for DeFi and other digital asset structures.
A lack of clarity in how they are treated by the courts prevents DeFi and the digital asset economy from developing more widely.
As a holder of NFTs or a participant in DeFi, you might think that legal uncertainty does not affect you — cryptoassets exist independently of any legal system and do not need to be controlled by regulations. But a lack of clarity in how they are treated by the courts prevents DeFi and the digital asset economy from developing more widely. Here are a few examples: