APPRAISAL OF THE LEGAL NATURE OF DIGITAL ASSETS: THE WAY FORWARD

Abstract

The growing adoption of the digital asset market has brought to light concerns about issues related to data privacy and security, financial stability and systemic risk, money laundering and criminal activity, national risk, the exercise of human rights, and financial inclusion. It is beneficial to conceptualize digital assets for legal and regulatory reasons. This is due to the requirement that the content of digital assets and associated actions be under control, not just their appearance. As a result, the conception of these assets is based on the concept of Asset form, or conventional instruments portrayed in digital form. Digital ledger technologies are the underlying technology. The question amongst others is whether there is a global legislation regulating financial technologies and digital assets? In a bid to answer the foregoing question, the researcher adopted the doctrinal method of research which entails the use of books, journals, articles, statutes, case laws and materials. This article found that the legal nature of digital asset is largely unsettled. It also found that although few municipal and regional legislations exist, they have not been able to address the issues arising from the operations of digital assets, not to talk of countries that have no such legal framework for the regulations of digital assets. Since there isn't any widely accepted international law on digital assets, digital assets are not yet classified using a standard method. This presents a problem for the management and control of digital assets, which are commonly encountered in international, multi-jurisdictional contexts. In view of the volatility observed in the cryptocurrency and digital asset markets, which includes recent cases of egregious fraud and unviable business models, this article recommended a more standardized and stringent regulatory framework to guarantee the operations and interoperations of digital within and across countries of the world.