The Hong Kong Court of First Instance (“CFI”) has for the first time declared that cryptocurrencies are property under Hong Kong law and are therefore capable of forming the subject matter of a trust in the recent case of Re Gatecoin Limited [2023] HKCFI 914.

After reviewing the major authorities in various common law jurisdictions, the CFI agreed with the approaches taken in the cases decided in these jurisdictions and reached a similar conclusion that cryptocurrencies contain inherently all the attributes of “property”.

Although Hong Kong Courts have previously granted proprietary injunctions to freeze cryptocurrencies in a number of cyber fraud cases, none of these cases expressly dealt with the nature of cryptocurrencies as property. The decision in Re Gatecoin Limited therefore provides the legal basis for owners of cryptocurrencies to obtain, for example, a proprietary injunction in respect of the crypto-assets. Such crypto-assets as property may be regarded as subject to a trust, they may be followed, or value may be traced through them.

To know more, please read our latest article for this update prepared by our Partner, Simon Wong, and our Associate, Kathy Siu.