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UK Proposing Property Category for Crypto Assets, SEC Facing Lawsuit Over NFTs
Aug. 06, 2024. 2 mins. read.
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The Law Commission of England and Wales recommends the UK classify crypto assets as a new form of personal property, while the SEC faces a lawsuit over NFT regulations.
The Law Commission of England and Wales has recommended that the UK government classify all crypto assets as a new form of personal property, addressing current legal gaps. Meanwhile, the SEC is being sued over the regulatory status of NFTs.
On July 30, the Law Commission of England and Wales published its final report urging the UK government to create a distinct category for crypto assets. The report emphasized the current inadequacies in legal categorization and its implications for crypto assets. As an independent body focused on law reforms, the commission highlighted the need for legal “flexibility” to recognize and protect digital assets as a unique form of personal property.
“The recognition of a distinct category of personal property” is necessary, according to the commission, to properly address and safeguard the interests associated with digital assets.
In a related legal development, FTX class action lawyers have moved to block Sullivan & Cromwell’s (S&C) dismissal motion. On July 29, these lawyers submitted a motion alleging that S&C exceeded standard legal practices by facilitating the fraudulent activities of the now-defunct cryptocurrency exchange, FTX. Court documents state that S&C lawyers created “misleading strategies that furthered FTX’s misconduct.” The lawsuit seeks damages for aiding and abetting fraud, fiduciary breaches, and civil conspiracy.
Additionally, on August 2, two U.S. Senators introduced a bill aimed at expanding the Secret Service’s powers to combat crypto-related criminal activity. The “Combatting Money Laundering in Cyber Crime Act of 2024” was introduced by Nevada-based Catherine Cortez Masto and Iowa-based Charles Grassley. If passed, the bill would allow the Secret Service to investigate crypto transactions by unlicensed money-transmitting businesses and potential fraud against U.S. financial institutions.
In another significant legal case, two artists filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) on July 29. The lawsuit seeks clarity on whether NFTs fall under the SEC’s regulatory authority. The plaintiffs’ attorneys are questioning the SEC on the necessity of registering NFT art before sales to the public and whether public disclosures regarding “risks” are required. This lawsuit aims to determine the exact regulatory requirements for NFT creators and sellers.
These developments highlight the ongoing legal challenges and regulatory uncertainties in the rapidly evolving landscape of digital assets and cryptocurrencies
Source: UK Proposing Property Category for Crypto Assets, SEC Facing Lawsuit Over NFTs
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