On July 30, news sources reported that the Law Commission of England and Wales announced its final report stating that the UK government redefined all crypto assets as a new kind of personal property. This report, released by an independent body that reviews and recommends law reforms, shows the present legal shortcomings in the classification of personal property surrounding crypto assets.
The commission reportedly observed that the current legal framework is devoid of the necessary flexibility to recognize and protect crypto assets effectively. This limitation leads to uncertainties in the legal implications of crypto assets and their ownership rights. The commission allegedly stated that having a dedicated classification of personal property specifically for crypto assets could resolve these gaps.
By doing this, the legal system would be facilitated to navigate through the complicated digital assets, like cryptocurrency and NFTs, which do not simply fall into existing property categories. The alleged reclassification can give a more lucid legal skeleton, offering better protection for digital asset owners and ensuring that their rights are aptly safeguarded. This reclassification would also align the UK’s legal framework with the evolving nature of digital technology, potentially nurturing more robust dynamics for innovation and investment in the digital asset space.
Sullivan & Cromwell’s Dismissal Motion
On July 29, FTX class action lawyers came forward with a motion against the dismissal motion started by the law firm Sullivan & Cromwell (S&C). The lawyers accused S&C of exceeding standard legal practices in its handling of the case concerning the now-defunct cryptocurrency exchange.
The court notes allegedly reveal that the class action lawyers state that S&C’s legal strategies added to FTX’s fraudulent activities. Particularly, the lawyers state that S&C created wrongful strategies that supported FTX’s misconduct. They further add that these strategies were not only ethically wrong but also adversely affected FTX’s investors. The current lawsuit is after huge damages for aiding and abetting fraud, fiduciary breaches, and civil conspiracy. The plaintiffs aim to hold S&C responsible for its supposed role in adding to FTX’s illegal activities and to gain compensation for the financial losses.
Will the Secret Service Powers be Used for Crypto Assets Crimes?
On August 2, Senators Catherine Cortez Masto of Nevada and Charles Grassley of Iowa supposedly introduced the “Combatting Money Laundering in Cyber Crime Act of 2024.” This bill aims to augment the Secret Service’s authority to combat crypto-oriented criminal activities.
If passed, the bill would allow the Secret Service the power to investigate cryptocurrency transactions concerning unlicensed money-transmitting businesses. Also, it would empower the agency to look into potential fraud influencing US financial institutions, bringing such activities under federal law enforcement’s scope.
Artists Sue SEC Over NFT Security Status
On July 29, two artists reportedly filed a lawsuit against the US Securities and Exchange Commission (SEC) asking for clarification on whether non-fungible tokens (NFTs) fall under the agency’s policy purview. The lawsuit aims to determine the specific conditions under which NFT creation and sales could fall under US securities laws.
The artists further add that the dirth of clear regulations adds legal uncertainty and hinders their ability to conduct business smoothly. They are requesting a formal opinion from the SEC on whether their NFT creations are considered securities and, therefore, fall under registration requirements and other regulatory obligations. The outcome of this lawsuit could define the way NFTs are treated under US law and could affect how artists and other stakeholders view the creation and sale of digital assets.
The plaintiffs reportedly state that the current policy uncertainty around NFTs creates chaos for creators and buyers alike. They look for clear guidance on whether NFT art needs to be registered with the SEC before it is sold and whether there are requirements for public disclosures linked to potential risks linked to NFT transactions. The result of this lawsuit could have huge consequences for the future of NFT regulation and how artists interact with these digital assets. Want to keep up with the NFT arena? Stay tuned with TNYR.
