In Practice

Despite the meteoric rise of cryptocurrency as an asset class, there has to date been little case law concerning it. This article looks at a recent cryptocurrency case which applies established principles relating to trusts, proprietary injunctions and worldwide freezing orders to this new asset class: Wang v Darby [2021] EWHC 3054 (Comm). This decision confirms that familiar legal principles apply equally to cryptocurrencies, although digital assets can shine a light on established areas of law. We discuss below the key issues arising from the application of established principles to novel circumstances and the way in which Wang v Darby represents a missed opportunity to address the more interesting points arising in existing case law concerning cryptocurrency.

In recent years, the cryptoasset market has developed rapidly, with market capitalisation for cryptoassets estimated to have been around US$2.6-3trn in 2021.1 The market for decentralised finance (DeFi), although still relatively small, has also expanded quickly from less than US$10bn in 2020 to nearly US$100bn in 2021.2 However, over the last few months the cryptoasset market – specifically cryptocurrencies – has been seeing one of its worst selloffs since a market rally in 2020. This has sparked panic amongst investors, causing substantial financial losses. Inevitably, this has seen a flurry of litigation globally in recent months. This trend is likely to continue. We consider the causes of the crypto crash and the likely litigation risks for financial institutions and advisers.

Embedded finance is, broadly, the availability of financial products, integrated into a company’s infrastructure, provided by non-financial institutions and capitalised by “traditional” financial institutions. Companies are providing these products directly to their own customers, cutting out financial institutions as intermediaries. The benefits of these technology driven products for end-users are efficiency of transactions and bundling complementary services to enhance customer experience (eg point of sale buy-now-pay-later (BNPL) credit).

In this article the authors examine recurring revenue transactions in the UK and European markets – what are they, who are they for, how they work, what are the key features and market trends?

In this In Practice article leading UK and international legal authority on Islamic financial law, Dr Lu’ayy Minwer Al-Rimawi, explains how the Bank of England’s webpages need to demonstrate a better understanding of Islamic finance law.

In this article the authors examine recent trends in leveraged finance transactions, looking at “Most Favoured Nation” (MFN) protection, dividend to debt reallocation mechanics, ineffective IP transfer prohibitions and super grower baskets/contribution debt baskets.

Draft technical standards concerning sustainability disclosures aim to make STS securitisations more appealing from an ESG investment perspective. This In Practice article examines the proposed regime and identifies some practical shortcomings.

Artificial intelligence (AI), with its power to process large volumes of data, can provide more personalisation of financial products and services for consumers at greater scale and efficiency, and at lower cost. It can, in principle, enable firms to provide better support for vulnerable customers (for example, to consumers without standard credit histories, or through the use of simplified advice). All this could help to advance the FCA’s desired outcome of increased access through greater financial inclusion.¹ This In Practice article considers the recent Discussion Paper to foster debate on this issue.

In this In Practice article, Latifah Mohamed discusses the impact of current rates of inflation on baskets and other monetary limits in loan agreements, and considers the case for, and practical implications of, indexing such baskets and limits in response.

The UK government has consulted on legislating to allow British courts to recognise foreign insolvency-related judgments under its enactment of the “original” UNCITRAL Model Law on cross-border insolvency (the Model Law), the Cross Border Insolvency Regulations 2006 (CBIR). The government is also considering incorporating the UNCITRAL Model Law on Enterprise Group Insolvencies (the Group Model Law) to promote closer co-operation on cross-border restructurings.