UK Law and Practice Contributed by: James Burnie, Kathryn Dodds, Nicky Androsov and Olga Antonova, gunnercooke llp
gunnercooke llp 1 Cornhill London EC3V 3ND UK Tel: +44 3330 143 401 Email: James.Burnie@gunnercooke.com Web: www.gunnercooke.com
1. Overview of Blockchain and Crypto- Assets 1.1 Blockchain 1.1.1 Evolution of Uses of Blockchain The blockchain has matured in the United Kingdom over in the last 12 months. As part of this, the market is generally splitting by use case. There is a fundamental split in this respect between the use of blockchain as a mere data storage facility, and the concept of crypto- assets. The former is relatively lightly regulated, the focus being on matters such as GDPR and outsourc- ing rules (to the extent that these apply, in the context of a material outsourcing in financial services). A par- ticularly interesting aspect here is the evolving nature of intellectual property. In particular, it has tradition- ally been considered that data cannot be patented as data and it is often characterised as a mathematical or abstract concept or business method (which are both expressly excluded from patent protection) or through its presentation. Similarly, software is also subject to an exclusion under UK patent law, although there are some examples where software which makes a tech- nical contribution has been successfully registered. However, as case law has evolved, this assumption is beginning to be more nuanced, and we are seeing certain aspects of different blockchains being patent- ed. However, currently the protection relates to the technical method or system and not the data stored in the chain. Crypto-assets, on the other hand, are generally becoming highly regulated, and how they are regulat- ed is generally split out by function. By October 2027, we are generally expecting to see a comprehensive
regulatory regime for crypto-assets come into effect, and this will impact the use of blockchain generally. 1.1.2 Regulatory Sandbox The Financial Conduct Authority (FCA) was the first regulator globally to pioneer the use of sandboxes, which is a safe space in which new concepts could be trialled in collaboration with the regulator. Whilst the sandbox is not specifically geared towards block- chain-based projects, they are heavily represented. In particular in early 2026 year there has been a focus on stablecoins, as this has been an early area of focus for the FCA in terms its new crypto-asset regulations. 1.1.3 Regulation of Blockchain Technology The attitude has been to make the UK a “crypto hub”, however in this respect it is important to stress that the focus is on outcomes, rather than activity. As such, the ambition is not to maximise the number of busi- nesses in the UK, but rather to ensure that users of blockchain, and holders of crypto-assets, understand what they’re holding, so that good firms flourish in the UK. In terms of how blockchain is regulated, therefore, the general approach is to ensure that consumers receive at least the same level of protection as is the case with traditional industries – and so no distinction is drawn on matters such as data protection and outsourcing requirements if blockchain is used. Whilst this caused some initial friction for the industry, we have generally seen the industry develop tools to ensure compliance with requirements such as the right to be forgotten, and so generally these have not stopped the industry developing.
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