Hong Kong Court Declares Crypto to be Property in New Ruling
In a landmark ruling, Hong Kong’s High Court declared crypto as property that can be held in trust. This marks the first time such a decision regarding asset class has been made in the city-state.
The ruling, which was handed down in liquidation of a case involving the now-defunct crypto exchange Gatecoin, essentially puts crypto on par with other intangible assets such as stocks and bonds.
Cryptocurrencies Constitute Property
The judgment was revealed by London-based law firm Hogan Lovells earlier this week. The report stated that Justice Linda Chan, who presided over the Gatecoin case, found that crypto “inherently” has all the attributes of property.
“Linda Chan J noted that “like other common law jurisdictions, our definition of ‘property’ is an inclusive one and intended to have a wide meaning.” The court felt it appropriate to apply and follow the lines of reasoning adopted in other jurisdictions that cryptocurrency was “property” and was capable of forming the subject matter of a trust.”
The latest ruling is in stark contrast to the status of crypto-assets in the United States which continues to remain ambiguous. A major government agency – Securities and Exchange Commission (SEC) – views most crypto assets (except for Bitcoin) as securities diverging from the viewpoint of the Commodity Futures and Trading Commission (CFTC), which considers Bitcoin and Ether to be commodities.
Regulations Around the World
On April 20th, the lawmakers of the European Union approved the world’s first comprehensive framework for crypto – Markets in Crypto Act (MiCA). The legislation seeks to reduce risks for consumers while purchasing crypto assets by holding service providers responsible if they lose investor funds. MiCA also introduces several requirements on crypto platforms, token issuers, and traders around transparency, disclosure, authorization, and supervision of transactions.
The US, on the other hand, is yet to deliver a comprehensive regulatory framework. As the war on crypto continues, several US-based crypto businesses are focusing to move operations abroad. Earlier this week, Coinbase announced considering moving to a friendlier jurisdiction. The Winklevoss twins’-led crypto exchange Gemini also revealed expanding its global engineering and operations teams to India.
Slamming the US counterparts, Tyler Winklevoss tweeted,
“While US regulators have been busy infighting and refusing to provide the most basic of clarity for the crypto industry, the European Union just approved the MiCA regulation, which provides a comprehensive regulatory framework for crypto in Europe. It’s sad to see the US being left behind on such an important technology and its promise.”
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Filed under: Bitcoin - @ April 23, 2023 7:43 pm