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The Protection of Crypto-Assets in International Investment Law

The Protection of Crypto-Assets in International Investment Law The recent spate of regulatory intervention in the crypto-industry suggests it is only a matter of time before investment treaty claims concerning crypto-assets emerge. Crypto-assets today represent immense economic value, but many are traded for pure financial speculation. As such, there is clear tension between international investment law and the nature of these cryptocurrencies as assets capable of treaty protection. Several questions emerge: how can decentralised assets be localised in a State's territory? Can (and should) States be liable to protect investors holding speculative assets, with a remote economic contribution, from State regulation? Is international investment law equipped to address the challenges to the conventional boundaries of jurisdiction and merits that these assets will provoke?To answer these questions, this article envisages a hypothetical crypto-exchange on which crypto-assets are traded worldwide. A hypothetical investor seeks to bring a claim against a State for regulating the exchange, but their only ‘investment’ is the crypto-tokens hosted on the exchange. Through this hypothetical, the article explores the legal and economic materialisation of a crypto ‘investment’, and highlights its relevance for substantive questions of expropriation and fair and equitable treatment (FET).  It also contends that traditionally flexible notions of ‘territory’ for financial instruments are unsuitable for crypto-assets, advocating a return to private international law instead.This article situates the immense potential of crypto-assets within the competing concerns of States’ newer investment treaties. Accordingly, it identifies the characteristics of value-generating crypto-assets that should be protected under international investment law. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png ICSID Review - Foreign Investment Law Journal Oxford University Press

The Protection of Crypto-Assets in International Investment Law

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Publisher
Oxford University Press
Copyright
© The Author(s) 2025. Published by Oxford University Press on behalf of ICSID. All rights reserved. For commercial re-use, please contact reprints@oup.com for reprints and translation rights for reprints. All other permissions can be obtained through our RightsLink service via the Permissions link on the article page on our site–for further information please contact journals.permissions@oup.com.
ISSN
0258-3690
eISSN
2049-1999
DOI
10.1093/icsidreview/siae040
Publisher site
See Article on Publisher Site

Abstract

The recent spate of regulatory intervention in the crypto-industry suggests it is only a matter of time before investment treaty claims concerning crypto-assets emerge. Crypto-assets today represent immense economic value, but many are traded for pure financial speculation. As such, there is clear tension between international investment law and the nature of these cryptocurrencies as assets capable of treaty protection. Several questions emerge: how can decentralised assets be localised in a State's territory? Can (and should) States be liable to protect investors holding speculative assets, with a remote economic contribution, from State regulation? Is international investment law equipped to address the challenges to the conventional boundaries of jurisdiction and merits that these assets will provoke?To answer these questions, this article envisages a hypothetical crypto-exchange on which crypto-assets are traded worldwide. A hypothetical investor seeks to bring a claim against a State for regulating the exchange, but their only ‘investment’ is the crypto-tokens hosted on the exchange. Through this hypothetical, the article explores the legal and economic materialisation of a crypto ‘investment’, and highlights its relevance for substantive questions of expropriation and fair and equitable treatment (FET).  It also contends that traditionally flexible notions of ‘territory’ for financial instruments are unsuitable for crypto-assets, advocating a return to private international law instead.This article situates the immense potential of crypto-assets within the competing concerns of States’ newer investment treaties. Accordingly, it identifies the characteristics of value-generating crypto-assets that should be protected under international investment law.

Journal

ICSID Review - Foreign Investment Law Journal – Oxford University Press

Published: Feb 26, 2025

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