The law is not always quick to catch up with technology. Anyone who has tried to explain cryptocurrencies, NFTs or other digital assets in traditional legal terms will appreciate that point.
However, Parliament has recently taken a small but meaningful step forward with the Property (Digital Assets etc) Act 2025. Whilst the Act itself is short (remarkably short by modern legislative standards), it carries potentially significant implications for property law and disputes.
As a solicitor practising in England and Wales, I suspect this is a piece of legislation that will quietly shape litigation, contentious trusts and probate and asset recovery work in the coming years.
A two-section act that does quite a lot
The Act contains only two operative sections. The first addresses the core issue: whether certain modern forms of assets can be treated as property at all.
Traditionally, English law recognises two main categories of personal property:
- Things in possession (physical objects you can possess, like a car or a watch); and
- Things in action (rights that can only be claimed or enforced through legal action, such as debts).
This classification has existed for centuries. The difficulty, of course, is that digital assets do not neatly fit either category.
Section 1 of the Act therefore clarifies that a thing is not prevented from being the object of personal property rights simply because it is neither a thing in possession nor a thing in action.
In effect, Parliament has opened the door to recognising a third category of personal property, which is particularly relevant to digital or electronic assets.
Section 2: the technical provisions
Turning specifically to section 2, the provision deals with the more technical matters of the legislation.
The immediate commencement is notable. Parliament has chosen not to delay implementation, which suggests an awareness that the courts are already dealing with disputes involving digital assets.
Why this matters in practice
In recent years, English courts have increasingly been asked to deal with disputes involving cryptocurrencies, digital tokens and other blockchain-based assets.
Judges have generally been pragmatic, often recognising such assets as property for the purpose of injunctions or asset-freezing orders. However, this has largely developed through case law rather than statute.
The 2025 Act essentially gives statutory backing to that judicial approach.
The clarification of digital assets property law has immediate practical implications for solicitors across multiple practice areas:
- Asset recovery, fraud litigation and contentious trusts and probate disputes
Digital assets frequently appear in fraud cases. It is further highly likely that they will start to creep in as part of Deceased estates. Given the significant value that these assets tend to have, it is highly likely that disputes will follow. Having clearer statutory recognition of property rights may make it easier to pursue:
- freezing orders;
- proprietary injunctions; and
- tracing claims.
- Insolvency proceedings
In insolvency, the classification of an asset can determine whether it falls within the estate available to creditors. The Act strengthens the argument that certain digital holdings form part of a debtor’s property.
- Commercial transactions
Where businesses deal in digital assets, certainty around property status helps with issues such as:
- security interests;
- trusts; and
- custody arrangements.
A deliberately flexible approach
One interesting feature of the Act is what it does not do.
Parliament has avoided providing a detailed definition of digital assets. Instead, the legislation simply confirms that something can still be property even if it does not fit the historic categories.
From a drafting perspective, this is likely intentional. Technology evolves far faster than legislation and a narrow statutory definition could quickly become outdated.
By contrast, this approach allows the courts to develop the law incrementally.
How can we help?
Kevin Modiri is a Partner in our expert Dispute Resolution team, specialising in civil disputes, insolvency, inheritance disputes, data breach claims and defamation claims.
If you want to discuss digital assets property law further or need advice about something similar, please do not hesitate to contact Kevin or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
Contact usIf this article relates to a specific case/cases, please note that the facts of this case/cases are correct at the time of writing.