ABSTRACT
Digital assets are becoming increasingly prevalent and accessible in both the global and Australian financial economies. A consequence of this is the inevitable increase in cross-border acquisitions and transfers of these assets. The DLT technology utilised by digital assets challenges the application of traditional private international law rules and in particular, the rule relating to the law applicable to property issues (the lex situs rule). This article examines the difficulties of applying the lex situs rule to digital assets. Ultimately, having regard to the underlying rationale of the lex situs rule and the wider objectives of private international law, a new multi-faceted three-step approach is proposed. The approach recognises that digital assets are uniquely ‘decentralised’ and applies an appropriate connecting factor based on the asset’s level of decentralisation.
Tsang, Nathan, Digital Assets and The Lex Situs Rule: A ‘Decentralisation’ Approach (July 26, 2023). Forthcoming, Australian International Law Journal.
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