Hong Kong’s judiciary has made a significant ruling that acknowledges cryptocurrencies as property. The decision was reached in a case involving the now-defunct crypto exchange Gatecoin. The court noted that crypto has “property attributes” and can be held in trust. Judge Linda Chan, in her analysis of the ruling, stated that the definition of ‘property’ in Hong Kong has a “wide meaning” and is intended to be inclusive.
The new ruling is expected to provide greater clarity for insolvency practitioners in Hong Kong in terms of digital assets. The law firm Hogan Lovells believes that the ruling will offer insolvency practitioners guidance on how to deal with cryptocurrencies during bankruptcy proceedings. The recognition of crypto as property similar to other assets like stocks could also boost Hong Kong’s position as a hub for digital assets.
The development of the metaverse, which is a virtual world created by the convergence of physical and virtual realities, is gaining traction, and the recognition of crypto as property could have significant implications for it. As the metaverse grows, the need for virtual currencies that can be used within it will increase. Cryptocurrencies, which are decentralized and operate independently of any central authority, could be used as virtual currencies within the metaverse.
However, the decision in Hong Kong is a significant step forward for the recognition of cryptocurrencies as a legitimate asset class, and it could have far-reaching implications for the crypto sector and the development of the metaverse. This decision aligns Hong Kong with other jurisdictions that also recognize cryptocurrencies as digital properties, such as the United States and China.