Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Friday, Mar 29, 2024

Cryptocurrency is property in Hong Kong, court rules for the first time

Cryptocurrency is property in Hong Kong, court rules for the first time

In a case involving now-defunct crypto exchange Gatecoin, a court ruled that cryptocurrencies are property that can form the subject of a trust.
A landmark court ruling recognising cryptocurrency assets as property has further boosted Hong Kong’s virtual asset industry, as the city takes steps to attract crypto firms in a bid to become a regional hub.

Cryptocurrencies constitute property, which can be put into a trust, Justice Linda Chan ruled on March 31 in a liquidation case involving now-defunct Hong Kong crypto exchange Gatecoin.

The judgment is the first time Hong Kong’s High Court has fully recognised such assets as property, a move that will bring certainty and confidence to related businesses in the city, lawyers say.

Prior to the judgment, cryptoassets were generally “believed” and “understood” to be property, but there was no legal justification or support for such a stance, said Padraig Walsh, partner at Hong Kong law firm Tanner De Witt.

“It’s moved from what you might say is a thesis to something that is actual law,” Walsh said. “It’s confirmed and is pretty much beyond doubt.”

The clarity will be helpful for a range of cryptocurrency-related issues that arise in respect to property, including devising trust arrangements and how the asset could be passed from the deceased to their beneficiaries, Walsh added.

The ruling, which puts cryptocurrency on par with other intangible assets like stocks and bonds, brings Hong Kong in line with other common law jurisdictions, where courts have already ruled on the issue, Hogan Lovells lawyers in Hong Kong wrote in a blog post published on Wednesday.

“It’s good for the Hong Kong courts,” Walsh said “It’s demonstrating to the legal community in the world that these are the kinds of issues that they can deal with.”

The ruling also further distinguishes Hong Kong from mainland China, where cryptocurrencies are not widely protected.

Hong Kong’s efforts to become a crypto hub exist as a result of the “one country, two systems” arrangement, and those efforts received official approval from Beijing officials for the first time last week.

The city’s moves to provide greater regulatory clarity and promote the virtual asset industry have attracted attention from some exchanges that were founded in China but left the country during crypto crackdowns in the mainland.

Under Beijing’s crypto ban, holders of cryptocurrency have sometimes been left with little room for recourse when things go wrong.

Mainland China does not recognise cryptocurrency as actual currency, resulting in a ruling in Shanghai last year that determined the sale of a car – which was never delivered – was invalid because it was paid for in cryptocurrency. In 2021, a Shandong court also determined that “cryptocurrency is not protected by law”.

However, there have been some positive signs that people could at least have their ownership over such assets recognised.

In a 2019 case involving lost bitcoin, the Hangzhou Internet Court ruled that the cryptocurrency is a type of virtual property that is protected by law.

The Shanghai High People’s Court also wrote in January 2021 that bitcoin has attributes of virtual property and virtual commodities. A Beijing court made similar statements in May 2022 in a ruling involving cryptocurrency theft.

Gatecoin, one of Hong Kong’s first cryptocurrency exchanges, was ordered by a court to wind down in 2019. During six years of business tumult, the company lost US$21.4 million worth of clients’ assets in a May 2016 hack, and nine of the city’s banks closed Gatecoin’s accounts.
Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×