In a landmark ruling, the Hong Kong High Court declared cryptocurrencies to be property that can be held in trust. This is the first time such an asset class decision has been made in the city-state.
The ruling, which was handed down in the settlement of a case involving the now-defunct Gatecoin cryptocurrency exchange, essentially puts cryptocurrencies on a par with other intangible assets like stocks and bonds.
Cryptocurrencies are property
The sentence was revealed by London-based law firm Hogan Lovells earlier this week. The report stated that Judge Linda Chan, who presided over the Gatecoin case, found that cryptocurrencies “inherently” have all the attributes of ownership.
“Linda Chan J noted that ‘like other common law jurisdictions, our definition of ‘property’ is inclusive and intended to have a broad meaning.” The court found it appropriate to apply and follow the lines of reasoning adopted in other jurisdictions that common law cryptocurrency was “property” and could be held in trust.”
The latest ruling is in stark contrast to the status of crypto assets in the United States, which remains ambiguous. A major government agency, the Securities and Exchange Commission (SEC), considers most crypto assets (except Bitcoin) to be values diverging from the view of the Commodity Futures and Trading Commission (CFTC), which considers that Bitcoin and Ether are commodities.
Regulations around the world
On April 20, European Union lawmakers approved the world’s first comprehensive framework for crypto: the Markets in Crypto Act (MiCA). The legislation seeks to reduce the risks to consumers when purchasing crypto assets by holding service providers liable if they lose investor funds. MiCA also introduces various requirements on crypto platforms, token issuers, and merchants around transparency, disclosure, authorization, and transaction monitoring.
The US, on the other hand, has yet to deliver a comprehensive regulatory framework. As the war on cryptocurrency continues, several US-based cryptocurrency companies are focusing on moving their operations offshore. Earlier this week, Coinbase announced that it was considering moving to a friendlier jurisdiction. Gemini, the crypto exchange led by the Winklevoss twins, has also revealed the expansion of its global engineering and operations teams to India.
Beating up his American counterparts, Tyler Winklevoss tweeted,
“While US regulators have been engaged in infighting and have refused to provide the most basic clarity for the cryptocurrency industry, the European Union has just passed the MiCA regulation, which provides a comprehensive regulatory framework for cryptocurrencies in Europe. It’s sad to see the US fall behind on such an important technology and its promise.”
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