On 2 December 2025, the Property (Digital Assets etc) Act 2025 (the “2025 Act”) came into force. The Act confirms that digital assets can attract personal property rights even though they fall outside traditional classifications. The Act is deliberately short, leaving the development of this new category of personal property, and the rights that may be attached to it, very much to the courts. Accordingly, while this new Act may have put one issue to bed it still leaves a number of others open to debate.
Why a new category of property was needed
Traditionally, English law divided personal property into two types: things or choses in possession (tangible items), and choses in action (enforceable rights). However, many digital assets – crypto‑tokens, NFTs, digital records etc. – did not sit neatly in either bucket. Against this backdrop, in November 2019 the UK Jurisdiction Taskforce (UKJT) issued a Legal Statement outlining its view that there was no bar under English law either (i) for cryptoassets to have the legal status of property or (ii) for smart contracts to be legally binding. Then in 2023, the Law Commission issued a report proposing a focused legislative change to clarify the status of digital assets, and in July 2024 published a draft bill suggesting recognition of a distinct third category of property for certain classes of digital assets. This then evolved into the 2025 Act.
Related developments
The UKJT has also recently established (i) an expert group chaired by Lord Justice Zacaroli tasked with producing non-binding guidance on the legal concept of ‘control’ in relation to this new, third category of ‘digital’ property; and (ii) an International Jurisdiction Taskforce (IJT) which will examine the main private law jurisdictions around the world, with a view to understanding what common ground may exist between their approaches to digital assets and digital trading – the hope being to minimise market uncertainty, to mitigate the risk of complex private international law issues arising, and to consider whether some form of alignment of approach can be achieved between them.
Key features of the Act
- Minimalist approach: The Act takes a streamlined approach, simply confirming that digital assets can qualify as property.
- Judicial development: The courts will now shape the boundaries of this new category through case law.
- Alignment with recent practice: it complements the trajectory of recent English case law treating cryptoassets and NFTs as property and therefore subject to interim remedies
Practical implications
- Ownership and transfer: clearer footing for owning, transferring and inheriting digital assets.
- Improved investor and consumer protection supporting ability to recover misappropriated assets and seek proprietary/freezing relief.
- Insolvency assets can be treated as property of an estate, aiding office‑holders.
- Enhances London’s attractiveness for fintech and Web3 businesses.
We will continue to watch the digital assets space with great interest, both in terms of how the 2025 Act is received and interpreted by the courts, and to see how existing law and regulations touching on this sector grapple with the ongoing challenges that inevitably will continue to be thrown up in the coming months and years. This includes how the courts will navigate the inherently cross-jurisdictional nature of digital assets, and enforcement actions brought in respect of assets that by design do not originate or ‘live’ in any particular jurisdiction.
