Regulating the use of Crypto-assets as collateral in secured transactions: U.S and Canadian Perspectives
Date
2023-05-19
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
ORCID
Type
Thesis
Degree Level
Masters
Abstract
The thesis is focused on regulating the use of crypto-assets as collateral in secured transactions. The ability of a debtor to receive a loan from a lender in exchange for its collateral is a vital part of global commercial activity. Crypto-assets are a relatively new asset class introduced with the term “cryptocurrency” in the Bitcoin Whitepaper released by Satoshi Nakamoto in 2008. Since the invention of crypto-assets, many regulatory efforts have been made to govern the use of crypto-assets by different countries including Canada. These regulatory efforts have led to policies on crypto-assets in several contexts such as taxation and their use in financial crimes. That crypto-assets use in secured transactions has yet to be expressly regulated in Canada has led to speculation on how the current personal property security law in Canada applies to crypto-assets. An examination of the current personal property security law in Canada reveals that, under existing law, it is difficult to acquire a reliable and effective security interest in crypto-assets. This thesis, therefore, identifies the current issues hampering the appropriate regulation of crypto-assets under Canadian secured transaction law, evaluates the consistency of the relevant laws with guiding secured transaction values such as facility and certainty, and recommends possible solutions to the current issues. The issues include the failure to expressly categorize crypto-assets as a form of personal property, the lack of suitable modes of perfecting security interests in crypto-assets, and the non-negotiability of crypto-assets. The analysis and recommendations made in this thesis are intended to bring the issues with crypto-related secured transactions to light so that they may be considered and addressed by lawmakers in Canada. The recommendations in this thesis will also be of interest to jurisdictions with similar secured transaction regulatory frameworks, which are considering the incorporation of crypto-assets into their secured transactions legislation as a unique form of personal property.
Description
Keywords
Secured transactions, crypto-assets, PPSA, Uniform Commercial Code, Bitcoin
Citation
Degree
Master of Laws (LL.M.)
Department
Law
Program
Law