Author: Han Kun Law Offices Ye Hanjie | Li Jiankun | Huang Mingchen

With the rapid development of financial technology, digital asset investment and trading are becoming increasingly popular. As an international financial center, Hong Kong not only promotes the improvement of the regulatory framework for digital assets but also keeps its judicial system in step with the times: applying legal principles to disputes related to cryptocurrencies and attempting to use innovative technologies to freeze digital assets. These measures help strengthen investor protection and increase their confidence in the digital asset market, enhancing investors' willingness to use Hong Kong law as the governing law for digital asset transactions. This article aims to introduce and review recent judicial decisions related to digital assets from Hong Kong courts.

In Re Gatecoin Limited[2023] 2 HKLRD 1079, [2023] HKCFI 914^[1], the High Court of Hong Kong ruled that cryptocurrencies are considered property under Hong Kong law and can serve as the subject matter of a trust.

The court followed the ruling of the New Zealand court in Ruscoe v Cryptopia[2020] NZHC 728, determining that cryptocurrencies meet the four criteria for "property" established in the UK case National Provincial Bank v Ainsworth[1965] AC 1175. In short, cryptocurrencies are intangible property:

1. Definable:Public keys assigned to cryptocurrency wallets are easily identifiable, possess sufficient uniqueness, and can be uniquely assigned to each account holder.

2. Identifiable by third parties: Only the private key holder can access the cryptocurrency and transfer it from one wallet to another.

3. Capable of assumption by third parties: Cryptocurrencies can and do actively participate in trading markets; rights of ownership in these markets are respected.

4. Some degree of permanence or stability: The entire transaction history of cryptocurrencies is stored on the blockchain [see paragraphs 57 and 59 of the judgment].

This judgment confirms that Hong Kong's position aligns with other common law jurisdictions, recognizing the proprietary nature of cryptocurrencies as legitimate property.

When determining whether a cryptocurrency exchange holds cryptocurrencies as a trustee for clients, the court considers the terms and conditions established between the exchange platform and its clients, as well as how the exchange operates, including how it handles cryptocurrencies.

For example, in the case of Re Gatecoin Limited, the court found that the most recent version of Gatecoin's terms and conditions did not declare a trust relationship, thus clarifying that no trust relationship existed between Gatecoin and its clients. The relevant terms and conditions further specified that cryptocurrencies could be stored in a pooled blockchain assets account or omnibus fiat account (i.e., cryptocurrencies were not segregated) [see paragraph 42 of the judgment]. Therefore, the cryptocurrencies deposited by Gatecoin clients were effectively considered Gatecoin's assets, and Gatecoin could decide how to use the cryptocurrencies in its wallets, including trading them. The audited financial statements of Gatecoin also treated the cryptocurrencies held by Gatecoin as its assets and regarded "client deposits" as liabilities [see paragraph 43 of the judgment].

For these reasons, the court ruled that according to the most recent version of Gatecoin's terms and conditions, Gatecoin held the cryptocurrencies in its own name, rather than as a trustee for its clients. In other words, in the event of exchange liquidation, clients who accepted the most recent version of the terms would be considered unsecured creditors, and their "deposits" would be treated as the exchange's assets, to be liquidated for payment of liquidation costs.

In recent years, Hong Kong courts have issued interim proprietary injunctions regarding cryptocurrency assets, for example: Nico Constantijn Antonius Samara v Stive Jean-Paul Dan[2021] HKCFI 1078^[2] (the injunction prohibited the defendant from dealing with his assets, including Bitcoin) and Yan Yu Ying v Leung Wing Hei[2021] HKCFI 3160^[3] (the injunction prohibited the defendant from dealing with related Bitcoin). The relevant orders confirm that Hong Kong courts can prohibit cryptocurrency holders from transferring cryptocurrencies from their wallets or otherwise dealing with them without court approval.

The High Court of Hong Kong, in the original litigation of Worldwide A-Plus Investments Ltd v A-Plus Meta Technology Ltd (HCA 2417/2024), approved the first tokenized injunction through blockchain technology, prohibiting the transfer of funds from two cryptocurrency wallets involved in a Tether fraud case amounting to over 2.6 million Hong Kong dollars.

The tokenized injunction breaks the limitations of traditional methods for delivering injunctions (hand-delivering a copy of the command along with necessary penalty notices to the parties), allowing court documents to be delivered to anonymous virtual wallet holders (in this case, directly placed on the Tron blockchain). Once the injunction is tokenized, anyone intending to trade with the involved wallet will see the injunction stored on the blockchain, preventing anyone from defending on the grounds of ignorance.

This judgment demonstrates that Hong Kong's legal system is keeping up with the development of digital assets and blockchain technology and sets a precedent for the use of tokenized injunctions.

In Wang Weiqing v Zhuo Yihao & Others[2025] HKCFI 4941^[4], the court ruled that the plaintiff could invoke a Bankers Trust order to compel the digital asset trading platform to provide relevant account information and transaction details, allowing the plaintiff to track his stolen assets.

In this case, the court lifted the ownership injunction against the cryptocurrency exchange hot wallet suspected of containing stolen assets, on the grounds that the plaintiff failed to make a full and frank disclosure to the court as required by a unilateral application, concealing potential defenses related to the nature of the hot wallet and the pre-litigation correspondence between the parties.

Although the court's lifting of the ownership injunction resulted in the plaintiff being unable to make a disclosure application in the form of an ancillary disclosure order, the court accepted and approved the plaintiff's invocation of a Bankers Trust order to require the exchange to provide relevant information to help the plaintiff track the stolen cryptocurrency.

This judgment reflects the Hong Kong courts' decision to follow the UK court's practice (in Ion Science Ltd v Persons Unknown[2020] EWHC 3688 (Comm), which issued a Bankers Trust order compelling Binance, a cryptocurrency exchange, to disclose information) by issuing Bankers Trust orders to cryptocurrency exchanges, assisting victims in tracking digital assets.

Hong Kong courts have made a series of landmark rulings: recognizing cryptocurrencies as property, being the first to apply tokenized injunctions to freeze digital assets suspected of being related to fraud, and utilizing Bankers Trust orders to compel cryptocurrency exchanges to disclose account information and transaction records related to stolen assets, assisting victims in tracking and recovering assets.

The improvement of the related legal framework significantly enhances protection for digital asset investors in Hong Kong and increases investor confidence, further consolidating Hong Kong's position as an international financial center.

The Hong Kong Financial Services and the Treasury Bureau previously announced its goal to position Hong Kong as a global leader in the development of virtual assets and to continuously develop an internationally competitive virtual asset industry^[5]. The Hong Kong government also published the Hong Kong Digital Asset Development Policy Declaration 2.0 in June 2025, outlining the government's vision for building a trustworthy and innovation-focused digital asset ecosystem, prioritizing risk management and investor protection. The framework proposed by the policy declaration emphasizes: establishing a unified and comprehensive regulatory framework for digital asset service providers, as well as expanding the variety of tokenized products.

We remain optimistic, believing that Hong Kong will continue to construct a more comprehensive legal framework to protect cryptocurrency assets. We also expect more litigation and arbitration cases involving cryptocurrency asset disputes, and Hong Kong courts will continue to improve their legal system and apply it to the realm of digital assets.

For information regarding Hong Kong's regulatory framework for digital assets, please refer to “From Virtual Assets to Digital Assets, the Changes and Continuities of the "Hong Kong Declaration 2.0".” Additionally, for information on the regulatory framework in mainland China regarding virtual currencies and real-world assets (RWA), please see “Interpretation and Thoughts on China's New Regulatory Provisions on Virtual Currency No. 42 Document” and “Turning Point - Interpretation of the New Regulations on Tokenization of Real World Assets (RWA).”

[1] See judgment at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=151622&currpage=T
See Decision at https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=151622&currpage=T

[2] See reasons for decision at: https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=135241&QS=%2B%7C%28HCA%2C902%2F2018%29&TP=JU
See Reasons for Decision at https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=135241&QS=%2B%7C%28HCA%2C902%2F2018%29&TP=JU

[3] See judgment at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=139582&currpage=T
See Decision at https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=139582&currpage=T

[4] See judgment at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=173524&currpage=T
See Decision at https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=173524&currpage=T

[5] Financial Services and the Treasury Bureau, Hong Kong Court Granted First “Tokenised Injunction Order”, Setting Legal Precedent in Virtual Asset Sector (https://www.facebook.com/100064860394243/posts/1038215571683780/?mibextid=WC7FNe&rdid=HW0LcDAq0hDQKAFB)
Financial Services and the Treasury Bureau, Hong Kong Court Granted First “Tokenised Injunction Order”, Setting Legal Precedent in Virtual Asset Sector (https://www.facebook.com/100064860394243/posts/1038215571683780/?mibextid=WC7FNe&rdid=HW0LcDAq0hDQKAFB)