Digital assets are no longer a fringe topic. Stablecoins are increasingly used in global commerce, tokenised securities are gaining traction and property professionals are beginning to encounter clients who want to settle transactions using blockchain-based assets. For solicitors and conveyancers, this raises a practical question: Who should hold the assets between exchange of contracts and completion? Many instinctively look to large, centralised exchanges such as Coinbase, Kraken or similar platforms, assuming these businesses can provide a modern version of escrow. They are recognised brands, technologically capable and familiar to many clients. Yet legal escrow is not simply custody. It is about trust, certainty, control and enforceability. That is where the risks begin. In traditional escrow, money is held temporarily under clearly defined legal conditions. In digital asset transactions, if a central platform holds the private keys, the client may no longer have practical control of the asset during the escrow period. That distinction matters. If completion is delayed, if an account is frozen or if withdrawals are restricted, the client may discover that beneficial ownership and real-world access are not the same thing.
The old industry phrase, “not your keys, not your coins”, is crude but legally relevant.
Recent history has shown that scale and branding do not eliminate custody risk. The collapse of FTX in 2022 left initially over $8billion of dollars in disputed customer claims. Celsius froze withdrawals before entering bankruptcy. US-based, Voyager Digital, filed for Chapter 11 bankruptcy in July 2022 after a liquidity crisis triggered by a default of more than $650 million on loans extended to crypto hedge fund, Three Arrows Capital (3AC). The collapse froze over $1 billion in customer assets, resulting in years of restructuring proceedings and only partial, phased repayments to creditors. Thus, the lessons appear evident where assets sit on a platform’s infrastructure and clients may face uncertainty over whether those assets are fully segregated, recoverable or subject to insolvency claims. In some failures, customers have effectively become unsecured creditors competing in restructuring processes. For a solicitor handling a property completion, inheritance distribution or corporate settlement, that is not an academic issue. It could mean the purchase money is unavailable on the day it is needed. Many assume blockchain-based payments are private. In reality, once funds pass through a centralised exchange, multiple layers of data can be created and retained. These may include identity verification records, transaction timestamps, wallet associations, counterparty information, internal monitoring logs and links generated through external blockchain analytics tool providers such as Chainalysis, Elliptic, Merkel science and CoinMetrics, to name just a few. For lawyers acting in sensitive matters such as divorce proceedings, corporate acquisitions, representing family offices, trusts or high-value conveyancing, this can materially reduce confidentiality and widen exposure to regulators, litigants or commercial counterparties. What begins as a payment route can quickly become a discovery trail.
Solicitor negligence and professional liability
Lawyers are not merely facilitators of payments. They owe duties of care and are expected to act in the best interests of their clients. If a firm recommends or adopts a structure that later results in frozen funds, missed completion deadlines, avoidable loss of value, unnecessary risk or unwanted disclosure, then complaints or negligence allegations may follow. This is particularly important in conveyancing where timing, certainty of funds and clean execution are central to the transaction.
Risks versus protective measures
Even well-known platforms remain exposed to operational hazards. Clients may face temporary withdrawal suspensions, cyber incidents, fraud attempts, system outages, sanctions reviews or account restrictions. Markets do not stop moving whilst these issues are resolved. If assets are immobilised during periods of volatility, value can move sharply before a transaction completes. A delay of days may be inconvenient, a delay of weeks can be highly damaging. Centralised custodial solutions may also create hidden costs that are often underestimated at the outset. Additional due diligence, repeated source-of-funds requests, transfer fees, internal compliance delays, dispute management time and the cost of external legal advice can all accumulate quickly. What initially appears convenient can become expensive once complexity emerges. This challenge also creates opportunity. English law is particularly well adapted to modern digital transactions because it has historically evolved to support trade, markets and cross-border commerce. It asks a practical question: “What do commercial parties need certainty on?” Then it develops solutions. Its trust law framework is especially powerful because it can separate:
- legal title
- beneficial ownership
- custody
- agency
- security interests
That maps naturally onto tokenised real estate and digital escrow structures. English law also offers wide contractual freedom, allowing sophisticated parties to build bespoke arrangements likely to be upheld if clearly drafted. That makes it highly suitable for programmable ownership models and milestone-triggered releases. This is particularly important for global real estate according to Savills is worth $393 trillion, yet transactions often remain slow, fragmented and expensive. Tokenisation could support:
- fractional ownership
- faster settlement
- improved collateral use
- programmable rental distributions
- easier cross-border participation
If English-law structures become the preferred wrapper for tokenised property, the UK could attract significant legal, structuring and dispute-resolution work. Could the UK also see further purchases of real estate by overseas buyers given, over the past decade, the number of properties in England and Wales owned by overseas companies has risen by 92%? An increase from 47,787 in 2015 to 91,791 in 2025 - almost doubling in ten years. The total value of these holdings now exceeds £125 billion (having surged by 40% in just the last three years) equivalent to an additional £38.5 billion.
The non-custodial alternative
A growing alternative model is non-custodial escrow. Under this structure, the client retains control of the asset in their own wallet whilst an independent escrow mechanism verifies and validates contractual milestones before release. This can reduce exposure to exchange balance-sheet risk because the asset is not sitting on a third-party platform. It may also improve speed, reduce custody disputes and preserve clearer lines of ownership. It is not risk-free (key management, adequate insurance, cyber hygiene and proper legal drafting remain essential) but it offers the potential to reduce the risk materially for those buying and selling assets including real estate.
AI will increase the pressure
Artificial intelligence will accelerate demand for cleaner settlement systems. AI-driven workflows will expect instant verification, automated milestones and transparent ownership records. If legal infrastructure remains slow and analogue while money becomes programmable, clients will migrate toward firms that understand both law and technology. Digital asset escrow is exposing a truth many legal professionals have yet to confront in the digital economy, moving value is no longer the hard part, protecting it is. What appears to be a convenient solution through major centralised platforms may actually transfer control, privacy and risk away from the client and toward third parties whose priorities are not legal certainty or fiduciary duty. A property purchase can fail not because the buyer lacks funds, but because access to those funds sits behind someone else’s balance sheet, systems or regulatory freeze.
For solicitors and conveyancers, this is more than a technology issue. It is a professional responsibility issue. As highlighted by the law firm, CMS, the EU AI Act requires robust human oversight, transparency and auditability for agentic AI systems, rather than setting a specific monetary threshold for when a “lawyer in the loop” is required. Therefore autonomous AI agents involved in high-risk or complex transactions are likely to require meaningful human intervention to satisfy the Act’s safety, accountability and risk management obligations. The firms that treat digital asset transactions like ordinary payments may inherit extraordinary liability. The firms that understand custody, control and settlement architecture may become the trusted advisers of the next decade. Yet within this disruption lies a major opportunity. English law, with its global credibility, trust structures and ability to separate ownership from control, is uniquely equipped for a world of tokenised property, programmable payments and AI-driven transactions. As global real estate worth $393 trillion begins to modernise, the legal systems that provide certainty will capture value.
The future will not reward those who simply adopt new technology. It will reward those who understand where trust truly sits when money becomes code.
This article first appeared in Digital Bytes (28 th of April, 2026), a weekly newsletter by Jonny Fry of Team Blockchain.