The Law Applicable to (Digital) Transfer of Digital Assets: The Transfer of Cryptocurrencies via Blockchains

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.