Hong Kong’s legal and judicial system has made a landmark decision recognizing cryptocurrency as property that can be “held in trust”.
The decision was made in a lawsuit involving former crypto exchange Gatecoin.
According to the law firm Hogan Lovells — which reported the case on April 18 – Judge Linda Chan presided over the case and said that Hong Kong defines “ownership” broadly, with a broad meaning that encompasses cryptocurrencies.
The decision is in line with similar rulings made in mainland China and the UK. The US Internal Revenue Service (IRS) also treats cryptocurrencies as property for tax purposes.
In the UK, a government-funded legal commission has found that cryptocurrency can be classified as a new type of property under current laws in England and Wales.
Gatecoin announced its closure and liquidation in 2019 following an attempt to recover disputed funds from a former payment service provider.
The liquidators have asked the court for instructions on whether the crypto held by Gatecoin should be treated as property held in trust or if it should be made available to all creditors, according to the Hogan Lovells report. The exchange held crypto worth over $17.8 million as of October 2022.
Although the court recognized that cryptocurrencies could be held in trust, it ultimately determined that a trust was not established in the Gatecoin case.
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