Cyber Law is exciting for lawyers because it is one of the few areas of English law that is rapidly evolving. It encompasses so many areas: commerce, finance, technology, data, privacy, etc. My area of practice as a barrister focuses on matrimonial finance and other financial disputes associated with family relationship breakdown, so I approach the cyber world with a particular interest in cryptocurrency and other digital assets owned by the parties in the context of divorce. This is uncharted legal territory. While many of my colleagues and I have litigated cases involving cryptoassets, there is yet to be a Family Court authority specifically addressing this type of asset and how it is to be approached in a divorce. Many of the legal principles and remedies that are being employed in their connection are drawn from analogies in civil litigation. This raises intriguing questions and practical challenges for practitioners. Cryptocurrency in Matrimonial Finance, which I have co-authored with Dean Armstrong KC, explores some of those challenges.
Blockchain gives rise to new tech trends and possibilities on a seemingly daily basis. A general, if unexciting, answer would be that 2022-2023 is likely to see greater integration of smart contracts into everyday business usage, particularly in a finance and commercial supply chain context. A more fun development might involve NFTs, which I suspect will expand beyond their current typical use case (art, music, collectibles etc.), into gaming and the metaverse, a development being pushed by many of the big tech players.
That’s a complicated question. To side-step it in true lawyer fashion, I would say that increased domestic regulation is probably inevitable. Globally it is being approached in different ways and at different speeds. In April, the UK government announced that it intends to consult on whether regulation is needed for a broader range of cryptoassets. This is against the backdrop of the existing registration requirements for cryptoasset businesses for AML purposes, and the bringing-in of stablecoins used for payments into the regulatory perimeter. This has the hallmarks of a ‘toe in the water’ for the UK government as it considers the impact of further regulation. What is clear is that cryptoassets are now an established and increasingly prevalent feature of the financial landscape. The global cryptocurrency market cap today is roughly US$1 trillion, which is considerable despite the damage wrought by the recent ‘crypto winter’.
Yes. If a cryptoasset is regarded as ‘property’ in law, then it will constitute an asset and one of the factors considered by the court in a matrimonial finance case. The debate on whether cryptocurrencies such as Bitcoin constitute ‘property’ has been largely one-sided following the UK Jurisdiction Taskforce’s ‘Legal Statement on the Status of Cryptoassets and Smart Contracts in November 2019. The question was explored in a handful of cases culminating in AA v Persons Unknown & Ors [2019] EWHC 3665 (Comm). That case is now the main authority for the proposition that cryptocurrencies do indeed constitute ‘property’ (and as such, they can be the subject of a proprietary injunction). This year the High Court took another step forward with an unreported case, Lavinia Deborah Osbourne v (1) Persons Unknown (2) Ozone Networks Inc. trading as Opensea, where the principle was applied in the context of two NFTs. The line of caselaw on this point suggests that it is highly unlikely that the English Court would decline to treat cryptoassets as a form of property in a matrimonial finance context. That being the case, they will constitute an asset available for division in the same way as any other type of asset.
