As per the analysis published by Hogan Lovells, a law firm in Hong Kong, cryptocurrency is found to have property attributes. Thus, the court deemed it appropriate to follow the applied reasoning and assume crypto as a property and form the subject matter of trust. It was further added that since the definition of “property” is inclusive and has wide meaning too.
Thus, a court acknowledged cryptocurrencies as property and thus can be held in trust in a ruling in collaboration with Gatecoin, the defunct crypto exchange. The decision of Hong Kong also aligns with other jurisdictions that consider cryptocurrency as a digital property.
Furthermore, Hogan Lovells, also states that the new ruling might give insolvency practitioners in Hong Kong clarity about digital assets. The case relates to Gatecoin, the Hong Kong–based crypto exchange that suffered losses in 2016 and lost around $2 Million in Digital Assets. On March 2019, the exchange received a mandatory liquidation order from the Hong Kong court.
The Internal Revenue Service in the United States also recognized cryptocurrencies as property for the purpose of taxation under Federal laws. This indicates that the principle applicable to the property transaction will also stand relevant for cryptocurrencies. Back in 2019, China also recognized Crypto as a property.
Similarly, Hong Kong pushes its goal to become a global crypto hub, Meanwhile, China’s state–affiliated banks are also taking the opportunity to build partnerships and onboard regulated crypto firms in Hong Kong.