The Treatment of Cryptotokens at English Law - Back to the Future

24 Pages Posted: 17 Jan 2021

See all articles by Simon Gleeson

Simon Gleeson

Clifford Chance; Queen Mary University of London, School of Law - Centre for Commercial Law Studies

Date Written: july 17, 2019


There is not, and should not be, any such thing as a “law of cryptotokens”. A cryptotoken is simply a tool which is used to effect a transaction. The role of the law is to decide:

1. Whether or not to give effect to that transaction; and
2. Whether the transaction has been entered into in accordance with the laws which apply to a transaction of that type.

As regards the first consideration, the law should approach any issue involving tokens by asking three simple questions:
• What was the token designed to do?
• What did the participants in the transaction concerned believe that they were doing?
• Would that assessment have been shared by people generally?

If the answers to all of these questions are clear, then the law should strive to deliver the intended outcome of the transaction.

As regards the second consideration, the primary legal task is to characterise the underlying transaction. For example, if the offer of a token constitutes the offer of an investment, then the offer should be subject to the ordinary law applying to the offer of investments. What is important here is not whether the underlying transaction is effected using a token or not, but the legal nature of the underlying transaction.

As regards the English judicial tradition, there is nothing new about any of this. The development of innovative payment mechanisms and transaction types in English law, whether through the development of promissory notes, of bills of exchange or negotiable securities, all involved the recognition by the courts of instruments which were already in circulation in the markets. There is no reason why the courts of today should be less accepting of market developments than were the courts of previous centuries.

In practice, cryptotokens are universally spoken of, and dealt with, as transferable property. There is no policy argument for refusing to recognise this treatment as a matter of law. Arguments about the definition of the term “chose in action” are of only antiquarian interest.

Keywords: e-money, cryptocurrency, cryptotokens, law of money, law of payment, custody, deposit

JEL Classification: K11, K12, K24, E42, E51

Suggested Citation

Gleeson, Simon, The Treatment of Cryptotokens at English Law - Back to the Future (july 17, 2019). Available at SSRN: or

Simon Gleeson (Contact Author)

Clifford Chance ( email )

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07962371512 (Phone)

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Queen Mary University of London, School of Law - Centre for Commercial Law Studies ( email )

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