Hong Kong Court Recognizes Cryptocurrencies as Property in Landmark Ruling – What Happens Next?
The High Court of Hong Kong has made a landmark ruling by recognizing crypto to be property in a legal matter that involved now-defunct crypto exchange Gatecoin.
Judge Linda Chan, who presided over the case, reportedly said that crypto has property attributes, according to an analysis of the ruling published by the law firm Hogan Lovells.
The court said that Hong Kong, in line with other common law jurisdictions, defines "property" broadly as "intended to have a wide meaning."
"Like other common law jurisdictions, our definition of ‘property’ is an inclusive one and intended to have a wide meaning."
According to the law firm, the new ruling can potentially give insolvency practitioners in Hong Kong greater clarity in terms of digital assets.
Chan’s ruling also means crypto is legally capable of being held on trust, Hogan Lovells added.
“The confirmation that holdings of cryptocurrencies constitute ‘property’ that is on a par with other intangible assets such as stocks and shares, brings Hong Kong into line with other common law jurisdictions,” Hogan Lovells said.
The ruling was made in a case involving Gatecoin Limited, a crypto exchange that operated domestically from January 2015 until its demise four years later.
In 2019, Gatecoin was instructed to cease operations and undergo liquidation after failing to retrieve funds lost in a disagreement with a payment services provider.
Following its closure in March 2019, Gatecoin’s liquidators sought court guidance on whether the crypto still held by Gatecoin belonged to customers “on trust” or could be made available to general creditors.
A trust is a right, enforceable in equity, to the beneficial enjoyment of property held by another party who actually holds legal title, according
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