The new law, the UK acknowledges Ethereum as personal property, and derivatives traders reestablish open interest positions following the October liquidation event.
On Dec. 2, Ethereum was officially registered as personal property in the United Kingdom. Royal Assent to the Property (Digital Assets etc) Act 2025 that day. Digital property is now in a third tier of personal property in English law.
This new position is shared by Bitcoin and other crypto-tokens. The Act eliminates the fact that property must either be in possession or in action as per the traditional definitions. Ambiguity in the law regarding the ownership of digital assets is no longer present.
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Courts Can Now Trace Stolen Coins Without Workarounds
Digital detectives now have greater protection under the law to seek cases against their offenders. Freezing orders and tracing mechanisms can be directly applied by the judges. It becomes easier to recover misappropriated tokens.
Clearer treatment is also given to exchange failures and insolvency proceedings. Banks, custodians and funds have fewer ambiguities in the way they organise secured lending or collateral arrangements around ETH. These changes were proposed by the Law Commission in 2023.
The act became effective on the spot. It is applicable in England, Wales and Northern Ireland. The measure was passed by parliament after several years of individual case court rulings that treated crypto as property.
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Derivatives Positioning Rebuilds After October Wipeout
Since October 10, Ethereum futures open interest has been increasing. The date was a violent liquidation date that flushed leveraged positions. Traders are reconstructing exposure despite spot prices that are still lower than they were in the autumn.
Binance Futures ETHUSDT perpetual contract records consistent gains. The positioning has increased as ETH is trading significantly below early-fall levels. This restored interest could be liquidated again in the coming months, as was warned by analyst Ted.
Ethereum may be forced into choppy ranges by market makers. That would clear both leveraged longs and shorts. Without spot price returning to October lows, open interest may drop. CoinGlass data indicates that ETH futures open interest is at $37.61 billion, which is nearly unchanged since the beginning of November.
Legal Framework Removes Barriers for Institutions
The Act places the UK at the forefront of other jurisdictions. It offers cleaner statutory law than EU laws or state laws in the United States. It did not introduce any special tax provisions or licensing.
Bitcoin Policy UK CEO Susie Ward said the law protects digital holdings legally. According to Freddie New, the Chief Policy Officer of the same organisation, it was one of the greatest reforms ever made to English property law in centuries.
Custodians are now able to record security interests over tokens with more confidence. Transactions of structured finance with ETH as security become easier. Courts are well-grounded in statutory terms as opposed to case interpretations.