• Hong Kong court recognizes cryptocurrency as property that can be “held on trust”.
• The ruling is in line with similar decisions made in mainland China and the U.K.
• The decision was reached in a lawsuit involving the now-defunct crypto exchange Gatecoin.
Hong Kong Court Recognizes Cryptocurrency
A landmark ruling has been made by the Hong Kong legal and justice system which recognizes cryptocurrency as property that can be „held on trust“. The decision was reached in a lawsuit involving the now-defunct crypto exchange Gatecoin. Justice Linda Chan presided over the case and declared that Hong Kong defines “property” broadly, with a wide meaning that encompasses cryptocurrencies. This ruling is in line with similar decisions made in mainland China and the U.K., as well as being treated as property for tax purposes by the U.S Internal Revenue Service (IRS).
Gatecoin Case Details
Gatecoin announced its shutdown and liquidation in 2019 following an attempt to recover disputed funds from a former payment services provider. Liquidators sought directions from the court on whether the crypto held by Gatecoin should be treated as property or not, which lead to this recent decision recognizing them as such.
Similar Decisions Made Elsewhere
In England and Wales, a government-funded law commission found that cryptocurrency can be classified as a new type of property under existing laws due to their unique characteristics. These include their decentralized nature, fungibility, divisibility, durability, transferability, and scarcity among others which make them more than just mere electronic records or data stored on blockchain networks according to British law experts at Hogan Lovells firm who reported this case on April 18th 2021.
Implications of Ruling
This ruling means that any assets associated with cryptocurrencies can now have corresponding rights attached to them when it comes to legal disputes such as insolvency proceedings or other matters related to transferring ownership or recovering lost funds for example if users experience losses due to hacking attacks or malicious actors trying to take advantage of vulnerabilities within digital asset markets. It also serves as an important step towards regulatory recognition of digital currencies within Hong Kong’s framework which will likely encourage further adoption amongst businesses operating within its borders going forward into 2021 and beyond for sure!
Conclusion
The recent decision made by Justice Linda Chan recognizing cryptocurrency held by Gatecoin as property shows progress towards regulatory recognition of crypto assets within Hong Kong’s borders despite still being largely unregulated at this point in time worldwide overall! This could open up new opportunities for businesses operating within this jurisdiction while also providing users with better protection against potential losses caused by fraudsters or other malicious actors online too so stay tuned here at CryptoSlate for more updates soon!
