The Hong Kong court officially declared for the first time in the Re Gatecoin Limited  HKCFI 91 case that cryptocurrencies are a form of property and can be held on a trust basis. This decision, made by Judge Linda Chan, is being considered a milestone.
The ruling is based on Gatecoin Limited’s 2018 terms and conditions, which contained a clear statement regarding the property rights of cryptocurrency.
Cryptocurrencies inherently possess all property rights by their nature.Judge Linda Chan
However, it was found that Gatecoin did not make a clear statement of intent to hold its customers’ cryptocurrencies in trust for safekeeping, and therefore, it is said that there was no question of holding cryptocurrencies securely for Gatecoin’s customers.
What happened to the Gatecoin exchange that caused the lawsuit?
Gatecoin is a Hong Kong-based cryptocurrency exchange that was founded in 2013. In 2016, Gatecoin was hacked and lost a significant portion of its customers’ assets. Gatecoin was unable to repay its debts to customers and filed for bankruptcy in 2019. The Re Gatecoin Limited  HKCFI 91 case was opened during the bankruptcy process to protect the status and rights of Gatecoin customers’ cryptocurrencies.
What is the importance of Hong Kong in the cryptocurrency market?
Hong Kong is one of the largest financial centers in Asia and has a strong market volume in cryptocurrency trading. Many popular cryptocurrency exchanges are based in Hong Kong, including Binance, Bitfinex, OKEx, and Huobi. In recent years, the Hong Kong government has played an active role in regulating cryptocurrencies. The government is also taking steps to encourage innovation in the field of cryptocurrencies. It has launched various programs to support the development of blockchain technology and digital assets, including financial programs to support cryptocurrency startups and courses to educate blockchain developers.
In conclusion, the Hong Kong court’s declaration that cryptocurrencies are a form of property is seen as an important step towards the legal recognition and regulation of digital assets. This decision is also expected to lead other countries to make similar decisions and take steps towards regulating digital assets.