A court in Hong Kong has ruled that cryptocurrencies can be recognized as property “capable of being held on trust”, law firm Hogan Lovells said in a report published on 19 April.
The law firm cited Justice Linda Chan — the judge presiding over a case involving defunct crypto exchange Gatecoin — who said that cryptocurrencies had the same attributes as that of property, and that it can be held in trust. This decision puts Hong Kong in line with other common law jurisdictions, whose definition of “property” also had a “wide meaning” intentionally.
Hogan Lovells noted that this ruling will give liquidators in Hong Kong a “greater clarity” on how to treat cryptocurrency assets held by companies that are undergoing wind-down procedures.
Chan’s ruling is similar to a 2019 court ruling in mainland China, when the Hangzhou Internet Court legally recognized Bitcoin (BTC) as digital property. Other jurisdictions have also made similar decisions, with the U.S. Internal Revenue Service (IRS) recognizing crypto as property for federal tax purposes.