Hong Kong Court Recognizes Crypto as Property
- Hong Kong has emerged as one of the new crypto hubs.
A Hong Kong-based court recognized cryptocurrencies as being property that could be held in trust. The decision was made involving the now-defunct cryptocurrency exchange Gatecoin. Judge Linda Chan reportedly stated that cryptocurrencies had property features. The court decided it was acceptable to adopt the rationale used by other jurisdictions, which states that cryptocurrency is property and may be the subject of a trust.
Analyzing the ruling, the law firm Hogan Lovells claims that the decision could offer Hong Kong insolvency practitioners more clarity about digital assets. Hong Kong would align with other jurisdictions if it confirmed that cryptocurrency is property, just like other assets like stocks.
A court in China also acknowledged cryptocurrency as property. In a ruling from 2019, the Hangzhou Internet Court formally recognized bitcoin as digital property. The Internal Revenue Service in the United States regards cryptocurrencies as property for the purposes of federal taxes, meaning that the rules that apply to property transactions also apply to transactions involving cryptocurrencies.
Some of the top companies in the crypto industry have their headquarters in the United States. However, a rising number of investors, developers, and businesses are trying to relocate to a more friendly location as a result of the government’s continued decision to adopt a strict regulatory stance toward digital assets and blockchain firms.
US regulators have taken strong actions against crypto companies such as Coinbase and Binance in 2023 alone. As a result, Hong Kong has emerged as one of the most likely destinations for projects seeking a friendlier climate.
Hong Kong recently relaxed some of its crypto laws to become more accommodating. Reports claim that authorities in Hong Kong plan to help crypto companies forge strong ties with domestic banks. This could see more crypto projects flock to the city-nation.
I have covered some exciting stories in my career as a journalist and find blockchain-related stories very intriguing. I believe Web3 will change the world and want everyone to be a part of it.
