Hong Kong court deems crypto as property, in ruling on defunct exchange Gatecoin

Hong Kong court deems crypto as property, in ruling on defunct exchange Gatecoin

Time Stamp: April 19, 2023 12:33 PM
Source Node: 2594416

Hong Kong’s High Court has recognized cryptocurrency as property in a March 31 landmark ruling in a legal tussle involving defunct crypto exchange Gatecoin.

See related article : British law body recommends categorizing crypto as a new type of property

Fast facts

Justice Linda Chan’s ruling concluded that crypto should be treated as property because it has value, be owned and can be transferred from one owner to another.

The ruling could result in stronger regulation of digital assets in Hong Kong and determine how crypto is taxed.

Gatecoin, which shuttered in March 2019, was ordered to stop operations and begin liquidation after it failed to recover disputed funds from a former payment services provider.

After its closure, Gatecoin’s liquidators sought advice from the court on whether to treat crypto held by the exchange as property held on trust or to make it available to a “general body of creditors,” according to court documents. 

The ruling could provide legal clarity for digital asset investors in Hong Kong and could set a precedent for future cases, according to local domestic firm Hogan Lovells .

See related article : NFTs ruled virtual property in China, its sales protected by law

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