Should Crypto Be Property?

Examining the legitimacy of crypto assets as property and its implications

Everyone wants to be rich. Bitcoin has become one of the dream assets of the past decade, skyrocketing in value and capturing global attention. But is Bitcoin truly property? What does “property” even mean in the legal sense? This research explores these questions by examining whether crypto assets like Bitcoin should be legally recognized as property.

Paper reviewed:

Stevens, Robert, Should Crypto Be Property? (September 27, 2025). Available at SSRN: https://ssrn.com/abstract=5536058 or http://dx.doi.org/10.2139/ssrn.5536058

Summary

This paper challenges the notion that crypto assets like Bitcoin should be considered 'property' under English law, highlighting their lack of inherent utility and potential for illicit activities.

Key Findings

The paper argues that crypto assets, such as Bitcoin, should not be considered "property" under English law because they do not confer rights against others that can be transferred.
The author differentiates between two legal senses of "property": rights to exclude others from physical things or areas of space, and transferable patrimonial rights such as debts, shares, and intellectual property rights.
The paper asserts that crypto assets lack inherent utility and are primarily used for speculative purposes or illicit activities like tax evasion, fraud, and extortion.
The author criticizes the Property (Digital Assets etc) Bill for confusing the distinction between rights and things, and for attempting to create a new category of "property" that is not grounded in existing legal concepts.
The environmental damage caused by cryptocurrency "mining" is significant, with global CO2 emissions comparable to those of Australia.

Implications

Business and Policy Implications

Businesses and policymakers should be cautious about recognizing crypto assets as a legitimate form of wealth or property, given their potential for illicit use and environmental harm.
The UK should consider suppressing the use of crypto assets rather than promoting them as a legitimate form of investment.
Regulators should focus on addressing the real issues associated with crypto assets, such as their use in extortion, tax evasion, and fraud.
Companies should be aware of the potential risks associated with investing in or using crypto assets, including their lack of inherent value and potential for market volatility.

Introduction

The question of whether crypto assets should be considered "property" under English law is a complex and contentious issue. The paper "Should Crypto Be Property?" by Robert Stevens examines the concept of property in the context of crypto assets and argues that they do not meet the necessary criteria to be considered as such. This discussion is crucial for businesses, policymakers, and legal professionals as it has significant implications for how crypto assets are treated under the law.

Background and Context

The rise of crypto assets has led to a reevaluation of the concept of property in the digital age. Crypto assets, such as Bitcoin, operate independently of traditional legal systems and central authorities, raising questions about their legal status. The paper provides a detailed analysis of the different senses in which "property" is used in law and argues that crypto assets do not fit neatly into existing categories. Understanding the legal status of crypto assets is essential for businesses and investors who are increasingly using these assets for various purposes.

The concept of property is fundamental to legal systems, and its application to crypto assets has significant implications for their use, transfer, and regulation. The paper highlights the need for clarity on the legal status of crypto assets to address concerns around their use for illicit activities and their environmental impact. By examining the arguments for and against recognizing crypto assets as property, this discussion aims to provide insights into the potential consequences of different approaches to their regulation.

The author begins by differentiating between two legal senses of "property": rights to exclude others from physical things or areas of space, and transferable patrimonial rights. Crypto assets are not considered property in the first sense because they are not physical things or areas of space. The paper then examines whether crypto assets can be considered property in the second sense, concluding that they do not confer rights against others that can be transferred.

One of the key arguments against recognizing crypto assets as property is their lack of inherent utility. Unlike other forms of property, such as housing or securities, crypto assets do not have an inherent value or use. Their value is derived from their potential for capital gain, which is often based on speculative behavior. The author argues that this speculative nature, combined with their potential for illicit use, makes them unsuitable for recognition as a legitimate form of property.

The paper also critiques the Property (Digital Assets etc) Bill, which aims to clarify the legal status of digital assets. The author argues that the Bill confuses the distinction between rights and things and attempts to create a new category of "property" that is not grounded in existing legal concepts. This approach is seen as problematic because it could lead to unintended consequences and further complicate the legal landscape surrounding crypto assets.

The environmental impact of crypto assets is another significant concern. The process of "mining" cryptocurrencies, which involves solving complex mathematical problems, consumes large amounts of energy and results in significant CO2 emissions. The author argues that this environmental damage is a strong reason against promoting crypto assets as a legitimate form of investment.

In conclusion, the paper presents a compelling case against recognizing crypto assets as property under English law. The lack of inherent utility, potential for illicit use, and significant environmental impact are all strong arguments against their recognition as a legitimate form of wealth or property. As the legal and regulatory landscape surrounding crypto assets continues to evolve, it is essential for businesses, policymakers, and legal professionals to carefully consider the implications of different approaches to their regulation.

The discussion highlights the need for a nuanced understanding of the complex issues surrounding crypto assets. By examining the arguments for and against recognizing crypto assets as property, this analysis aims to provide insights into the potential consequences of different regulatory approaches. As the use of crypto assets continues to grow, it is crucial that stakeholders have a clear understanding of their legal status and the potential risks and benefits associated with their use.

The implications of this discussion are far-reaching, with significant consequences for businesses, policymakers, and investors. By understanding the legal status of crypto assets and the potential risks associated with their use, stakeholders can make informed decisions about their involvement in the crypto market. As the regulatory landscape continues to evolve, it is essential that businesses and policymakers remain aware of the complex issues surrounding crypto assets and their potential impact on the economy and society.

The analysis presented in this discussion is relevant to a wide range of stakeholders, including businesses, investors, policymakers, and legal professionals. By providing a detailed examination of the complex issues surrounding crypto assets, this discussion aims to contribute to a deeper understanding of the potential consequences of different regulatory approaches. As the use of crypto assets continues to grow, it is essential that stakeholders have access to accurate and informative analysis to inform their decision-making.

In the next part of this series, we will continue to explore the implications of recognizing crypto assets as property, examining the potential consequences for businesses, investors, and the broader economy. We will also discuss the potential regulatory approaches that could be taken to address the complex issues surrounding crypto assets.

Main Results

The paper "Should Crypto Be Property?" by Robert Stevens examines the concept of property in relation to crypto assets, such as Bitcoin. The main findings of the paper are presented in several key areas.

Distinction Between Property Senses

The author differentiates between two senses of "property" used by lawyers: rights against others to exclude them from areas of space or physical things, and patrimonial rights that are transferable. A third, non-legal sense refers to economic stores of wealth.

Analysis of Crypto as Property

The paper argues that crypto assets do not fit neatly into the traditional categories of property under English law. The author contends that recognizing crypto as property would require creating new rights, which is a matter of justice, not law.

Instrumental Value of Crypto

The author questions the instrumental value of crypto assets, arguing that their uses are limited and often facilitate illicit activities such as tax evasion, fraud, and extortion. The paper highlights that the most significant use of crypto is as a store of wealth, but this is based on a "greater fool" expectation, making it unsustainable.

Proposed Uses of Crypto

The author examines proposed uses of crypto, such as smart contracts, decentralized finance (DeFi), non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs). The paper concludes that these uses either do not require crypto or are not significant enough to justify recognizing crypto as property.

Methodology Insights

The research approach employed in the paper is a doctrinal analysis of the concept of property and its application to crypto assets. The author draws on legal theory, jurisprudence, and comparative law to examine the issues.

Importance of Methodology

The methodology is important because it provides a nuanced understanding of the complex issues surrounding crypto assets. By analyzing the concept of property and its different senses, the author sheds light on the challenges of applying traditional property law to novel digital assets.

Analysis and Interpretation

The findings of the paper have significant implications for businesses, investors, and policymakers.

Implications for Businesses and Investors

The paper suggests that recognizing crypto as property could create new risks and uncertainties. Businesses and investors should be cautious when dealing with crypto assets, as their value is highly speculative and subject to significant regulatory risks.

Regulatory Approaches

The author argues that instead of recognizing crypto as property, regulators should focus on suppressing illicit uses of crypto assets. This could involve introducing regulations to prevent tax evasion, fraud, and extortion.

Practical Considerations

The paper highlights the need for a nuanced understanding of the complex issues surrounding crypto assets. Businesses and investors should be aware of the potential risks and benefits of using crypto assets and take steps to mitigate these risks.

Competitive Advantages and Market Opportunities

The author suggests that the UK should not seek to become a hub for crypto assets, as this could facilitate illicit activities. Instead, the UK should work with other countries to suppress the use of crypto for nefarious purposes.

Actionable Recommendations

Business leaders and policymakers should:

Be cautious when dealing with crypto assets due to their speculative nature and regulatory risks.
Consider the potential risks and benefits of using crypto assets and take steps to mitigate these risks.
Support regulatory approaches that suppress illicit uses of crypto assets.

The paper concludes that recognizing crypto as property is not justified, given its limited uses and potential for facilitating illicit activities. The next part of this series will continue to explore the implications of recognizing crypto assets as property and discuss potential regulatory approaches.

Practical Implications

The debate surrounding whether crypto should be considered property has significant practical implications for businesses, managers, and policymakers. The findings of this research have far-reaching consequences for the way crypto assets are treated under the law.

Real-World Applications

The classification of crypto assets as property would have a substantial impact on various industries, including finance, law, and technology. For instance:

Financial Services: If crypto assets are considered property, financial institutions may need to reassess their treatment of these assets in terms of custody, trading, and reporting.
Legal Proceedings: The characterization of crypto assets as property could influence the outcome of legal disputes involving crypto, such as divorce proceedings or bankruptcy cases.
Taxation: The tax implications of crypto assets would need to be reevaluated if they are considered property, potentially leading to changes in tax treatment and compliance requirements.

Strategic Implications

Businesses and managers must consider the strategic implications of recognizing crypto assets as property. This includes:

Risk Management: Companies dealing with crypto assets must assess the potential risks associated with their use, including regulatory risks, market volatility, and security threats.
Compliance: Businesses may need to adapt their compliance frameworks to address the changing regulatory landscape surrounding crypto assets.
Investment Decisions: The classification of crypto assets as property could influence investment decisions, as investors may view these assets as more or less attractive depending on their legal status.

Who Should Care?

The findings of this research are relevant to a wide range of stakeholders, including:

Business Leaders: Executives and decision-makers in industries that interact with crypto assets, such as finance, technology, and law.
Policymakers: Regulators and lawmakers responsible for shaping the legal and regulatory environment surrounding crypto assets.
Investors: Individuals and institutions considering investing in crypto assets or companies that deal with these assets.

Actionable Recommendations

To navigate the complex landscape surrounding crypto assets, businesses and managers can take the following steps:

Monitor Regulatory Developments: Stay informed about changes in laws and regulations related to crypto assets.
Assess Risk Exposure: Evaluate the potential risks associated with crypto assets, including regulatory risks, market risks, and security risks.
Develop Compliance Frameworks: Establish or update compliance frameworks to address the evolving regulatory landscape surrounding crypto assets.
Consider Alternative Uses: Explore alternative uses for blockchain technology that do not rely on crypto assets, such as tokenization of assets or smart contracts.
Support Regulatory Clarity: Encourage policymakers to provide clear guidance on the treatment of crypto assets under the law.

Implementation Considerations

When implementing these recommendations, businesses and managers should consider the following factors:

Regulatory Uncertainty: The regulatory environment surrounding crypto assets is rapidly evolving, and businesses must be prepared to adapt to changing requirements.
Industry Collaboration: Companies should engage with industry peers and regulatory bodies to shape the development of clear and effective regulations.
Risk Management: Businesses must prioritize risk management when dealing with crypto assets, including implementing robust security measures and monitoring regulatory developments.

Conclusion

The question of whether crypto should be considered property is a complex issue with significant practical implications for businesses, managers, and policymakers. By understanding the findings of this research and taking actionable steps, stakeholders can navigate the evolving landscape surrounding crypto assets and make informed decisions about their use and treatment under the law.

The main takeaways from this research are:

Crypto assets are not necessarily property: The classification of crypto assets as property is not justified, given their limited uses and potential for facilitating illicit activities.
Regulatory clarity is essential: Businesses and managers need clear guidance on the treatment of crypto assets under the law to make informed decisions.
Risk management is critical: Companies dealing with crypto assets must prioritize risk management, including implementing robust security measures and monitoring regulatory developments.

Ultimately, the decision to recognize crypto assets as property will depend on a nuanced understanding of their uses, risks, and benefits. By providing clear guidance and promoting regulatory clarity, policymakers can help businesses and managers navigate this complex issue and make informed decisions about the role of crypto assets in their operations.