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Online trading in a wide range of cryptocurrencies, tokens and vouchers has taken off in the past few years and the law faces a stiff challenge in keeping up with such developments. An employment case on point concerned a financier who was promised 10,000 'utility tokens' as a signing-on bonus when he took a new job (Box v Quant Network Ltd).
The man was promised the tokens – which give digital access to services or online applications – as a sweetener before he accepted employment with a company at an annual salary of £135,000. He had not received them by the time he was made redundant about a year later and complained to an Employment Tribunal (ET).
Ruling on his case, the ET noted that, although a market exists on which the tokens can be traded, they are not legal tender. They are not true cryptocurrencies in that they are not assigned a face value by those who trade in them. Better described as utility tokens or vouchers, they have no fixed value expressed in monetary terms. Their value fluctuates in accordance with market movements.
On that basis, the ET found that the tokens do not fall within the definition of 'wages' as set out in Section 27 of the Employment Rights Act 1996. The man's claim that the failure to issue him with the tokens amounted to an unauthorised deduction from his wages therefore could not succeed as a matter of law.
However, the ET found that the company had made an unconditional commitment to issue him with the tokens if he entered its employ. Having done so, he had a contractual right to them. His claim was not defeated by the fact that his entitlement to the tokens was not mentioned in his employment contract. Upholding his breach of contract claim, the ET awarded him £23,500, that sum representing the market value of the tokens on the date of his appointment.