This week, a significant decision was made by Hong Kong’s High Court that recognizescryptocurrency as property. This ruling marks the first time such a declarationhas been made in the city-state in regards to digital assets. The court’s stance was established as part of a legal matter connected to Gatecoin Limited, a locally operated exchange from 2015 until its closure in 2019. After the exchange’s loss of funds from a dispute involving a payment services provider, liquidators requested court guidance on whether any remaining cryptocurrency possessed by Gatecoin should be held for customers “on trust” rather than made available to general creditors. Justice Linda Chan’s ruling ultimately determined that cryptocurrencies inherently possess all the qualities of property under local legislation.

In addition, Chan suggested that the definition of property in Hong Kong should be expansive and hold a wide meaning. The ruling from the High Court brings Hong Kong in line with other common law jurisdictions and also provides further insight into how cryptocurrencies should be treated. This acceptance of cryptocurrency as property is reflected by the Internal Revenue Service in the US, who also consider it a possession of value.

Aside from offering significant legal gains, this ruling is beneficial to the current efforts of Hong Kong to reinvigorate its status as a digital assets hub. Clara Chan, executive director of the Hong Kong Monetary Authority, spoke of her belief that digital advancement should be embraced and initiatives should be taken to even the field of participants. The same sentiment was echoed at Web3 Festival, a conference that united innovators in the blockchain industry to discuss potential of utilizing technology for good.

The global recognition of cryptocurrency as property sets a much-needed legal base for wider acceptance and growth of the industry. Governmental strides towards making the region more favorable for digital asset investments is sure to open more channels for investments and opportunities, as well as serve to increase the trust that’s held in such currencies.



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