Lloyd's Maritime and Commercial Law Quarterly
TITLE, CONTROL AND POSSESSION IN THE DIGITAL ASSET WORLD
Hin Liu*
Cases across the common law world have ruled that cryptocurrencies can be the subject of property rights. This raises the logically prior question of how exactly one acquires such rights to cryptocurrencies and digital assets generally.
Digital and physical assets are similar in many ways, and it is suggested that one should acquire an original title to a digital asset in circumstances that are the broad equivalent to that of a physical asset (ie, the equivalent of “possession”). However, as a matter of doctrine, this threshold should not be called “possession”, since applying the “possession” jurisprudence to the digital asset space would lead to many undesirable consequences. Instead, the concept of “control” should be used. With “control”, there is no need to deal with a set of possession-dependent doctrines designed for physical assets, and it is the preferable concept once its meaning in the context of digital assets is clarified.
I. INTRODUCTION
Cases across the common law world have ruled that cryptocurrencies are property.1 This raises the question of how one can acquire (an original legal) title to a digital asset. Thus far, there has been no discussion of this issue in the case law, but this logically prior question is something that must be tackled, as questions regarding (for example) transfer of title, extinction of title and interference torts depend on the answer to this question.
Digital and physical assets share various similarities: for example, that they exist independently of the legal system, and can be transferred, stolen or lost. As such,
* Lecturer of Law and DPhil Law Candidate, University of Oxford. The author would like to thank Luke Rostill, Ben McFarlane, Matthew Kimber and Louise Gullifer for their comments/input on this piece. This article was written before the Law Commission’s latest Consultation Paper on digital assets was published (Law Commission of England and Wales, Digital Assets: Consultation paper (Law Com No 256, 2022)).
The following abbreviations are used:
Bridge et al, Personal Property: Michael Bridge, Louise Gullifer, Kelvin Low and Gerard McMeel (eds), The Law of Personal Property, 3rd edn (London, 2021);
Clerk & Lindsell: Michael A Jones et al, Clerk and Lindsell on Torts, 23rd edn (London, 2020)
FCAR: Financial Collateral Arrangements (No 2) Regulations 2003;
Goode & Gullifer: Roy Goode and Louise Gullifer, Goode and Gullifer on Legal Problems of Credit and Security, 6th edn (London, 2017);
Rostill, Possession: Luke Rostill, Possession, Relative Title, and Ownership in English Law (Oxford, 2021).
1. As a matter of personal property law: see eg Ruscoe v Cryptopia Ltd [2020] NZHC 728; Quoine Pte Ltd v B2C2 Ltd [2020] SGCA(I) 02; AA v Persons Unknown [2019] EWHC 3556 (Comm); [2020] Lloyd’s Rep FC 127; [2020] 4 WLR 35; Toma v Murray [2020] EWHC 2295 (Ch); Fetch.ai Ltd v Persons Unknown [2021] EWHC 2254 (Comm); Litecoin Foundation Ltd v Inshallah Ltd [2021] EWHC 1998 (Ch).
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