A court in Hong Kong has recognized cryptocurrencies as a form of property that can be held in trust, bringing the region in line with other jurisdictions that recognize digital assets as property. The ruling was made in a case involving Gatecoin, a Hong Kong-based cryptocurrency exchange that suffered a hack in 2016. The exchange subsequently received a mandatory liquidation order from a Hong Kong court in March 2019. In her analysis of the ruling, Judge Linda Chan noted that the definition of property in common law jurisdictions was intended to have a wide meaning, and that crypto has property attributes. The decision could potentially provide greater clarity to insolvency practitioners in Hong Kong regarding digital assets.
The Internal Revenue Service in the US recognizes cryptocurrencies as property for federal tax purposes, and a court in China has also recognized Bitcoin as digital property. As Hong Kong works towards its goal of becoming a global crypto hub, China’s state-affiliated banks are partnering with regulated crypto firms in the region, despite a ban on crypto-related activities in China.
