There is no clear decision on whether Bitcoin (BTC) and cryptocurrencies are securities or commodities.
While this issue continues to be debated in the USA, a court in Hong Kong defined cryptocurrencies as "property-property" in a case related to the closed cryptocurrency exchange Gatecoin.
Law firm Hogan Lovells said the court used the term "goods that can be held securely" for cryptocurrencies, Coindesk reports.
With this decision, cryptocurrencies were defined as "property" on par with other intangible assets such as stocks and stocks.
Linda Chan, the judge of the court, described the cryptocurrencies as property, stating that property should be interpreted in a broad sense.
Hogan Lovells, who stated that this decision was a landmark, said in his report:
“In 2019, the cryptocurrency exchange Gatecoin announced its closure.
The liquidators, who started proceedings after this news, asked the court for clarity on whether cryptocurrencies are a fiduciary property.
Judge Linda Chan began by examining the nature of blockchain technology and cryptocurrencies, the types of digital wallets operated and controlled by Gatecoin, and the way digital assets are transferred from one wallet to another during business.
Commenting broadly, Linda Chan decided that cryptocurrencies are "property" and can be the subject of a trust.
While the court said that cryptocurrencies by their very nature could constitute the subject of a trust, it found that a trust was not established on specific grounds in the Gatecoin case.”
Commenting on the court's decision, the Hogan Lovells law firm stated that this decision would provide liquidators with greater clarity on how to handle cryptocurrencies.