Authored By: Anne-Sophie Barbe
University of Law
Abstract
Over the last decade, crypto assets have moved from a niche idea to a recognised part of the global digital economy. They have created new opportunities in areas like finance, technology, and investment, but they have also posed serious challenges for legal systems that were built around traditional forms of property and regulation. In the UK, both regulators and the courts have tried to respond to these developments, but it is still not clear whether the current approach is enough.
This article looks at whether the UK is keeping up with the rapid growth of crypto assets. It assesses how the law has adapted so far, where major gaps and risks still exist, and how the UK’s response compares to other jurisdictions. The article argues that, although there has been real progress, further changes are needed if the UK is to offer legal certainty, protect investors, and realistically position itself as a leading jurisdiction in the digital economy.
INTRODUCTION
In just over a decade, crypto assets have shifted from a niche experiment to a key part of the global economy. Bitcoin, launched in 20091, was the first and remains the most recognisable, but it has been followed by thousands of other tokens and innovations such as DeFi, NFTs, and debates about central bank digital currencies (CBDCs)2. These developments create opportunities for commerce and investment but raise serious legal questions about ownership, fraud, consumer protection, and enforcement3.
The UK has begun to respond. In 2019, the UK Jurisdiction Taskforce confirmed that crypto assets could be treated as property under English law4. This was reinforced in AA v Persons Unknown, where Bitcoin was recognised as property capable of being the subject of an injunction. More recently, Tulip Trading v Van der Laan considered whether blockchain developers might owe fiduciary duties, stretching existing doctrines to fit new contexts. Parliament has also legislated: the Financial Services and Markets Act 20235 brought certain stablecoins into regulation, integrating digital assets into financial law6.
However, many issues remain unresolved. DeFi, NFTs, and cross-border transactions are still largely outside formal regulation7. The collapse of FTX in 2022 showed the scale of risks when oversight is weak, with billions lost8. Although the UK government has expressed a desire to be a global crypto hub, critics argue that the current approach is fragmented and reactive9.
This article asks whether the UK is keeping pace with the digital economy. It first outlines the legal framework and progress made through case law and legislation. It then examines weaknesses, focusing on enforcement, investor protection, and international cooperation. Finally, it considers how other jurisdictions, including the EU, have approached regulation, before assessing what reforms are needed for the UK to remain credible and competitive.
RESEARCH METHODOLOGY
This article uses a doctrinal and analytical approach. Primary sources such as legislation and case law are examined, including the Financial Services and Markets Act 202310 and the Proceeds of Crime Act 200211. Guidance from the FCA and the UKJT Legal Statement 2019 were also considered12.
Key cases include AA v Persons Unknown [2019]13, which recognised Bitcoin as property; Tulip Trading v Van der Laan[2023]14, on fiduciary duties of developers; and Ion Science Ltd v Persons Unknown (2020)15, which concerned freezing orders in crypto fraud. These demonstrate how courts are applying existing principles to new technologies.
Secondary sources such as academic commentary from the Modern Law Review16, reports from HM Treasury and the NCA, and news reports17 (e.g. the FTX collapse in the Financial Times)18provide context and critical evaluation.
The research is mainly analytical, evaluating whether current law works effectively in practice. It also includes a comparative element, drawing on the EU’s MiCA Regulation19 and other jurisdictions to see whether the UK is keeping pace internationally.
LEGAL FRAMEWORK
The UK’s legal framework for crypto assets is still fragmented. Unlike traditional instruments, crypto assets were not built with existing laws in mind, leaving regulators and courts to adapt gradually20.
A turning point was the UKJT’s 2019 Legal Statement on Crypto assets and Smart Contracts, which confirmed that crypto could be recognised as property under English law21. This was quickly supported in AA v Persons Unknown, where Bitcoin was treated as property capable of injunction22.
On legislation, the Financial Services and Markets Act 2023 regulated certain stablecoins, reflecting their use in payments23. However, other tokens, NFTs, and DeFi platforms remain unregulated. The FCA has issued guidance distinguishing between security, utility, and exchange tokens24, but most cryptocurrencies used for investment fall outside the regulatory perimeter, leaving investors exposed.
Other laws, such as the Proceeds of Crime Act 2002, have been used to seize or freeze crypto linked to crime25. While effective in some cases, cross-border enforcement remains problematic. Government ambitions are clear — in 2022, the UK announced plans to be a “global hub” for crypto assets26, followed by HM Treasury’s 2023 consultation on extending regulation27. Yet until proposals become law, the framework remains incomplete.
JUDICIAL INTERPRETATION
Case law has been one of the main driving forces behind the development of crypto asset law in the UK. Since Parliament has not yet created a full statutory framework, judges have often had to decide whether traditional legal principles can cover something as new and technical as digital assets28.
One of the most influential cases is AA v Persons Unknown (2019)29. The dispute came from a ransomware attack where Bitcoin had been paid to the hackers. The claimant asked the court for a proprietary injunction over the Bitcoin. The High Court accepted that Bitcoin could be treated as property, which was a big step forward because it confirmed that crypto is more than just data. This decision also reflected the position taken by the UK Jurisdiction Taskforce earlier that year. Even though the ruling was welcomed, it did not solve the problem of how to enforce such orders internationally, especially when assets move across borders.
A more controversial development came in Tulip Trading Ltd v Van der Laan (2023)30. The issue there was whether blockchain developers could owe fiduciary duties to users who lost access to their crypto. The High Court initially said no, but the Court of Appeal took a different view and said the claim was at least arguable. This raised important questions about whether developers can be held legally responsible for assets on networks they do not directly control. Some commentators see this as an example of how English law can adapt to new realities, while others think it risks creating legal uncertainty in a fast-moving industry.
Another relevant case is Ion Science Ltd v Persons Unknown (2020), an unreported but widely discussed decision31. The case involved crypto fraud, and the court granted a freezing order to help trace the stolen funds. This showed that courts are willing to use existing remedies to deal with crypto-related wrongdoing. However, as with AA v Persons Unknown, there are still practical limits when exchanges or wrongdoers are based overseas.
Overall, the courts have been flexible and proactive in recognising crypto assets as property and making available remedies like injunctions and freezing orders. But their decisions also reveal the limits of relying on case law alone. Without clearer legislation, there are unresolved questions around enforcement, the responsibilities of developers, and how far existing doctrines can stretch before they become unstable.
CRITICAL ANALYSIS
Even though there has been progress through both case law and regulation, the overall framework for crypto assets in the UK still has major gaps. One of the biggest problems is that only parts of the market are regulated. The Financial Services and Markets Act 2023 mainly deals with stablecoins32, so other tokens, NFTs, and DeFi platforms are left outside any real oversight. This means that many investors operate without the protections they would normally have in traditional finance. The law is developing, but it is doing so in fragments rather than as a unified system.
Enforcement is another serious issue. Even when courts recognise crypto as property and grant injunctions, digital assets can be moved quickly and anonymously, often across borders33. This makes recovery difficult in practice, especially when cooperation from overseas exchanges is uncertain. So, while remedies exist on paper, their effectiveness depends heavily on jurisdiction and technology.
There are also areas of legal ambiguity. Crypto assets are treated as property, but they are not legal tender, which creates confusion about their place in the financial system34. The Tulip Trading case adds another layer of uncertainty by opening the possibility that developers might owe legal duties35 to users, without clearly defining those duties. Some academics argue that unpredictability like this undermines commercial confidence and creates risks for both innovators and investors36.
Looking internationally, it becomes clear that the UK may be falling behind. The EU’s MiCA Regulation introduces a single framework that covers token issuers, exchanges, and service providers across all member states37. In contrast, the UK still relies on scattered case law and partial legislation. The United States may not have a unified system either, but regulators like the SEC and CFTC have been more assertive in enforcement actions38. Countries such as Japan and Singapore have gone further by licensing crypto exchanges and setting clear compliance standards39.
The UK has shown that common law can adapt, but adaptation alone is not enough. Without a more structured and forward-looking regulatory approach, it risks losing credibility and investment to jurisdictions that offer more legal certainty. The current approach feels more reactive than strategic, which makes it harder for the UK to claim leadership in the global digital economy.
RECENT DEVELOPMENTS
In the last few years, the UK has made several moves to update its approach to crypto assets, which shows that policymakers are aware of the risks of doing too little while other jurisdictions move ahead. However, progress has been gradual rather than transformative, and many of the most significant reforms are still in consultation stages rather than in force40.
The Financial Services and Markets Act 2023 is currently the most notable legislative change41. It brings certain stablecoins within the scope of UK financial regulation when they are used for payments. This was an important step because stablecoins are increasingly used in everyday transactions and pose different risks compared to highly volatile cryptocurrencies. However, the Act stops short of dealing with the wider crypto market, so major areas like Bitcoin, NFTs and DeFi services still fall outside the regulatory net.
Following this, HM Treasury launched a consultation in 2023 on a broader regulatory framework for crypto assets42. The proposal suggested extending oversight to exchanges, custodians and a wider range of tokens. While this marks a shift towards a more structured regime, it remains at the proposal stage, and nothing has been implemented yet. Critics argue that until these measures become law, claims of leadership in digital finance remain more aspirational than real.
Alongside legislative efforts, the Bank of England has been exploring the idea of a central bank digital currency (CBDC), often referred to as the “Digital Pound.”43 Supporters argue that it could modernise payments and provide a secure digital alternative to private cryptocurrencies. However, others have raised concerns about surveillance, privacy, and the impact on commercial banks if people move their money into CBDC accounts instead.
Media coverage and public debate have also shaped the conversation about regulation. The collapse of the FTX exchange in 2022 was a turning point internationally and in the UK44. The scandal not only exposed how vulnerable investors can be in lightly regulated markets, but it also increased pressure on governments to act faster. In the UK, it strengthened arguments in favour of stricter oversight, given the scale of the losses involved and the reputational damage to the industry.
At the policy level, the UK government has repeatedly stated that it wants the country to become a “global hub” for crypto assets45. This message has been welcomed by sections of the fintech and blockchain industries, which see regulatory recognition as a sign of legitimacy. However, critics argue that ambition alone is not enough and that the UK risks being overtaken by jurisdictions like the EU and Singapore if it continues to move slowly.
Taken together, these developments show that the UK is aware of the need for a more coherent regulatory model, but change has been incremental. There is a noticeable contrast between the language of leadership and the actual pace of legal reform. Until the proposed measures are fully implemented and extended beyond stablecoins, the UK risks remaining behind more decisive jurisdictions such as those operating under the EU’s MiCA framework46.
CONCLUSION
The rise of crypto assets has forced legal systems across the world to react faster than they are used to, and the UK is no exception. The courts have undoubtedly played a crucial role in filling early gaps. Cases like AA v Persons Unknown and Tulip Trading v Van der Laan show that English law is capable of adapting core principles to new forms of digital property and responsibility47. These decisions have helped establish that crypto can be treated as property and have opened up important questions about duties owed within decentralised systems.
At the same time, Parliament and regulators have taken some meaningful steps, particularly through the Financial Services and Markets Act 2023 and FCA guidance48. The recognition of stablecoins as regulated assets is a sign that the UK is not ignoring the growing role of crypto in the financial system. However, these developments only cover part of the market. Major areas like NFTs, DeFi platforms and unbacked tokens still sit largely outside any clear statutory framework.
The biggest concern is that the overall approach remains reactive and incomplete. Enforcement is still difficult in practice because crypto assets move across borders quickly and anonymously49. The courts can only go so far without legislative backing, and policy ambitions to make the UK a “global hub” sound less convincing when the regulation underneath is patchy.
Looking at other jurisdictions makes the picture clearer. The EU’s MiCA Regulation provides a unified legal model that applies across member states, covering exchanges, issuers and stablecoins in one framework50. Singapore and Japan have licensing regimes that give investors defined protections and responsibilities51. Compared to these examples, the UK risks appearing hesitant or slow, even though it has the legal tools and expertise to take a stronger lead.
In the end, the UK has made meaningful progress, but it is not yet operating at a level that matches the speed or scale of the digital economy. The foundations are there, especially in case law, but without a more joined-up regulatory strategy, the system will continue to lag behind technological change. If the UK genuinely wants to lead in this sector, it will need to move beyond piecemeal reforms and put in place a clearer, more confident framework. Only then will it be able to compete with jurisdictions that have already taken more decisive action52.
BIBLIOGRAPHY
Primary Sources
Cases
AA v Persons Unknown [2019] EWHC 3556 (Comm)
Ion Science Ltd v Persons Unknown (Unreported, Commercial Court, 2020)
Legislation
Financial Services and Markets Act 2023
Proceeds of Crime Act 2002
Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on Markets in Crypto-Assets (MiCA)
Secondary Sources
Official Reports & Regulatory Guidance
Bank of England, The Digital Pound: A New Form of Money for Households and Businesses? (Consultation Paper, February 2023)
Financial Conduct Authority, Guidance on Cryptoassets (PS19/22) (2019) HM Treasury, UK to Become a Global Hub for Cryptoasset Technology and Investment (Press Release, April 2022)
HM Treasury, Future Financial Services Regulatory Regime for Cryptoassets: Consultation (January 2023)
National Crime Agency, National Strategic Assessment of Serious and Organised Crime 2023
UK Jurisdiction Taskforce, Legal Statement on Cryptoassets and Smart Contracts (November 2019)
Academic Articles
Emilios Avgouleas and Aggelos Kiayias, ‘The Promise of Blockchain Technology for Global Securities and Derivatives Markets: The New Financial Ecosystem and the Challenges’ (2019) 80 Modern Law Review 125
Sarah Green, ‘Cryptoassets and English Property Law’ (2020) 136 Law Quarterly Review 175
Geoffrey P Miller, ‘Regulation of Cryptocurrencies in Comparative Perspective’ (2021) 44 Fordham International Law Journal 63
News & Commentary
Financial Times, ‘FTX: The Collapse of a Crypto Empire’ (2022)
Osborne Clarke, ‘Cryptoassets: English Court Grants Worldwide Freezing Order in Respect of Bitcoin Fraud’ (17 December 2020)
1 Satoshi Nakamoto, ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ (2008).
2 Financial Conduct Authority, Cryptoassets: Feedback and Final Guidance (PS19/22, 2019
3 HM Treasury, UK Regulatory Approach to Cryptoassets and Stablecoins: Consultation and Call for Evidence (January 2021)
4 UK Jurisdiction Taskforce, Legal Statement on Cryptoassets and Smart Contracts (November 2019).
5 Financial Services and Markets Act 2023
7 FCA, Consumer Warning on Cryptoassets (2021).
8 Financial Times, ‘FTX: The Collapse of a Crypto Empire’ (2022)
9 House of Commons Treasury Committee, Regulating Crypto (2023).
10 Financial Services and Markets Act 2023.
11 Proceeds of Crime Act 2002
12 UK Jurisdiction Taskforce, Legal Statement on Crypto assets and Smart Contracts (November 2019); FCA, Guidance on Crypto assets (PS19/22) (2019)
13 AA v Persons Unknown [2019] EWHC 3556 (Comm)
14 Tulip Trading Ltd v Van der Laan [2023] EWCA Civ 83
15 Ion Science Ltd v Persons Unknown (unreported, Commercial Court, 2020)
16 Eg Sarah Green, ‘Crypto assets and English Property Law’ (2020) 136 LQR 175.
17 HM Treasury, Future Financial Services Regulatory Regime for Crypto assets: Consultation (2023); National Crime Agency, National Strategic Assessment (2023).
18 Financial Times, ‘FTX: The Collapse of a Crypto Empire’ (2022)
19 Regulation (EU) 2023/1114 (MiCA)
20 Chris Reed, Law for the Digital Age (Hart Publishing 2023) 112
21 UK Jurisdiction Taskforce, Legal Statement on Crypto assets and Smart Contracts (November 2019)
22 AA v Persons Unknown [2019] EWHC 3556 (Comm)
23 Financial Services and Markets Act 2023.
24 Financial Conduct Authority, Guidance on Crypto assets (PS19/22) (2019)
25 Proceeds of Crime Act 2002 26 HM Treasury, UK to Become a Global Hub for Crypto asset Technology and Investment (Press Release, April 2022)
27 HM Treasury, Future Financial Services Regulatory Regime for Crypto assets: Consultation (January 2023).
28 C Bryce, ‘Judicial Responses to Cryptoassets in Common Law Systems’ (2021) 47 Journal of Business Law 213.
29 AA v Persons Unknown [2019] EWHC 3556 (Comm)
30 Tulip Trading Ltd v Van der Laan [2023] EWCA Civ 83
31 Ion Science Ltd v Persons Unknown (unreported, Commercial Court, 2020)
32 Financial Services and Markets Act 2023
33 Ion Science Ltd v Persons Unknown (unreported, Commercial Court, 2020).
34 M Yates, ‘Cryptocurrency and Legal Status in English Law’ (2021)
42 Company Lawyer 89 35 Tulip Trading Ltd v Van der Laan [2023] EWCA Civ 83
36 Sarah Green, ‘Cryptoassets and English Property Law’ (2020) 136 LQR 175
37 Regulation (EU) 2023/1114 (MiCA)
38 Geoffrey P Miller, ‘Regulation of Cryptocurrencies in Comparative Perspective’ (2021) 44 Fordham Intl LJ 63.
39 Emilios Avgouleas and Aggelos Kiayias, ‘The Promise of Blockchain Technology for Global Securities and Derivatives Markets: The New Financial Ecosystem and the Challenges’ (2019) 80 MLR 125
40 House of Commons Treasury Committee, Regulating Crypto (2023)
41 Financial Services and Markets Act 2023
42 HM Treasury, Future Financial Services Regulatory Regime for Cryptoassets: Consultation (January 2023)
43 Bank of England and HM Treasury, The Digital Pound: A New Form of Money for Households and Businesses?(Consultation Paper, 2023)
44 Financial Times, ‘FTX: The Collapse of a Crypto Empire’ (2022)
45 HM Treasury, UK to Become a Global Hub for Cryptoasset Technology and Investment (Press Release, April 2022)
46 Regulation (EU) 2023/1114 (MiCA)
47 AA v Persons Unknown [2019] EWHC 3556 (Comm); Tulip Trading Ltd v Van der Laan [2023] EWCA Civ 83
48 Financial Services and Markets Act 2023; Financial Conduct Authority, Guidance on Cryptoassets (PS19/22) (2019)
49 on Science Ltd v Persons Unknown (unreported, Commercial Court, 2020)
50 Regulation (EU) 2023/1114 (MiCA)
51 I Avgouleas and A Kiayias, ‘The Promise of Blockchain Technology for Global Securities and Derivatives Markets’ (2019) 80 MLR 125
52 House of Commons Treasury Committee, Regulating Crypto (2023)
