Yüksel Ripley on Law Applicable to (Digital) Transfer of Digital Assets
Technology is challenging private international law as many other areas of law. Difficulties raised by cryptocurrency transfers on blockchain are particularly significant because private international law techniques are relying on localisation, as well as on concepts such as internationality and characterisation that are not easy to identify in this case. Cryptocurrency transfers through blockchain are not relying on intermediation services as applicable in traditional forms of financial transactions. This makes it difficult to idetermine the service provider or the characteristic performer and pinpoint them to a real-world location or to concentrate the connections related to a transaction to a particular place. Further, pseudonymity on the blockchain makes it difficult to identify the participants to the system and their locations.
Burcu Yüksel Ripley (Senior Lecturer at the University of Aberdeen) is addressing these aspects and the ways in which the law applicable to transfers of cryptocurrencies can be determined in a paper she made available on SSRN. The paper is entitled The Law Applicable to (Digital) Transfer of Digital Assets: The Transfer of Cryptocurrencies via Blockchains and is forthcoming in Fogt, M. M. (ed.) Private International Law in an Era of Change with Edward Elgar.
The abstract reads as follows:
Transfer of digital assets including cryptocurrencies gives raise to various important legal questions. One of them is the law applicable to their transfers via blockchains. Traditional concepts and techniques of private international law are challenged by blockchain in the determination of the applicable law. Disintermediation makes it difficult to identify a service provider or characteristic performer in the systems underpinned by blockchain. The distributed nature of the ledger raises issues with ascribing the ledger or blockchain and an asset digitally recorded on it to a real-world location and also gives rise to the lack of concentration of connections with a particular place. Pseudonymity in the systems underpinned by blockchain poses problems with the identification of the system participants as well as their locations. The purpose of this chapter is to examine some of the key issues concerning the law applicable to (digital) transfer of digital assets by focusing on cryptocurrency transfers via blockchain. These issues include internationality, characterisation and determination of the applicable law under the unitary approach (leading to the application of a single law) and the segmented approach (resulting in splitting the applicable law). In its analysis, this chapter utilises an analogy to electronic funds transfers (EFTs) and funds transfer systems in order to offer an alternative way of thinking to find solutions to the problems concerning cryptocurrency transfers via blockchains. It also aims to contribute to the current academic discourse as well as ongoing law reform projects in the area with a new perspective.