Published on July 19, the UK Law Commission’s 2017-2018 Annual Report details the authority’s work throughout the year and its various recommendations for legal reform. Included in this year’s review is a section dedicated to EDCCs (also called smart contracts). Because of the numerous advancements and news coverage relating to EDCCs, the independent agency expects the contracts to be increasingly utilized by businesses to execute legal contracts. The report states:
“It is important to ensure that English courts and law remain a competitive choice for business. Therefore, there is a compelling case for a Law Commission scoping study to review the current English legal framework as it applies to smart contracts.”
The document goes on to describe a forthcoming research project “to ensure that the law is sufficiently certain and flexible to apply in a global, digital context and to highlight any topics which lack clarity or certainty” as they relate to EDCCs. The legal authority has started its initial research, and it expects the project to officially begin sometime this summer.
This year’s review is preceded by a December 2017 publication from the law commission that announced its interest in EDCCs. “We will … be making sure the law supports cutting edge technical innovation such as automated vehicles and smart contracts,” the authority noted.
The 2017-2018 report also includes discussion of reforms to anti-money laundering (AML) law. The law commission believes that existing law incentivizes a high volume of poor-quality suspicious activity reports that lack significant intelligence value. With the publicity around crypto-related money laundering crimes, it is possible that these offenses are on the legal body’s radar, although a final AML report will not be released until late 2018.
The UK delved into the legal and regulatory realm of crypto earlier this year. On April 6, the state’s Financial Conduct Authority said that cryptocurrency derivatives might qualify as financial instruments. In late May, the same authority announced it had launched an investigation into 24 crypto companies.
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