Recently the English Commercial Court has established in AA v Persons Unknown and Others, re Bitcoin, that Bitcoin shall be deemed an asset and not a service, breaking from the ambiguity that has surrounded regarding the definition of digital assets.
The case involved an insurance company based in Canada that was subject to ransomware via a cyberattack. The company itself held its own insurance from a UK insurance company, which paid the ransom fee in Bitcoins. The UK insurer then traced the Bitcoins to Biting exchange, which led the UK insurer to issue a proprietary injunction for the possession of the Bitcoins.
A proprietary injunction entails that the respondent is not able to deal or trade with the assets that the claimant has claimed proprietary interest upon.
The English Commercial Court has held that cryptocurrencies should be viewed as a crypto asset, and by that, it sides with the UK Jurisdiction Taskforce (UK JT) Legal Statement on Crypto Currencies.
The approach taken by the Commercial Court can be seen as a spearheading the global approach when it comes to the definition of digital assets, which might lead to harmonization in the field of Fintech and digital assets in the EU and will define cryptocurrencies either as an asset or as a service.
As currently there is no unification or harmonization in the field of cryptocurrencies in the EU, this step, as minor of an injunction as it seems, is paving the first steps for the harmonization of the definition of cryptocurrencies in the EU.
The EU should see this injunction as an opportunity, rather than a hindrance, especially in light of Brexit, whilst enabling the EU Commission to tackle the area of cryptocurrencies in legislative form rather than action plans.