Hong Kong court recognizes cryptocurrencies as property

In one of the recent court rulings involving the now-closed crypto exchange Gatecoin, a Hong Kong court has recognized cryptocurrencies as property.

By Staff

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In a decision regarding the now-defunct cryptocurrency exchange Gatecoin, a Hong Kong-based court recognized cryptocurrencies as being property that can be held in trust.

In an analysis of the ruling published by the law firm Hogan Lovells, Judge Linda Chan reportedly said that crypto has property attributes. The court also deemed that it was appropriate to follow reasoning applied by other jurisdictions that crypto was property and could form the subject matter of trust.

 Chan noted, “Like other common law jurisdictions, our definition of ‘property’ is an inclusive one and intended to have a wide meaning.“

According to Hogan Lovells, the new ruling can potentially give insolvency practitioners in Hong Kong greater clarity in terms of digital assets. Confirming that crypto constitutes property similar to other assets like stocks aligns Hong Kong with other jurisdictions.

The case involves Gatecoin, a Hong-Kong based crypto exchange that suffered a hack back in 2016, losing around $2 million in digital assets. On March 2019, the exchange announced that it had received a mandatory liquidation order from a Hong Kong court. 

As Hong Kong pushes its goal of becoming a global crypto hub, China’s state-affiliated banks are taking the opportunity to build partnerships and onboarding regulated crypto firms in Hong Kong. The events unfolded despite a ban on crypto-related activities in China.

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