Authors: 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 has not only promoted the improvement of the regulatory framework for digital assets, but its judicial system has also kept pace with the times: applying legal principles to disputes related to cryptocurrencies and attempting to use innovative technologies to freeze digital assets. These measures help to strengthen the protection of investors and increase their confidence in the digital asset market, and strengthen investors' willingness to use Hong Kong law as the governing law for digital asset transactions. This article aims to introduce and review the recent judicial decisions of Hong Kong courts related to digital assets. A. Starting point: Cryptocurrency is recognized as 'property' in Hong Kong In the case of Re Gatecoin Limited[2023] 2 HKLRD 1079, [2023] HKCFI 914[1], the Court of First Instance of the High Court of Hong Kong ruled that cryptocurrency is property under Hong Kong law and can be used as the subject of a trust. The court followed the New Zealand court's judgment in Ruscoe v Cryptopia [2020] NZHC 728, finding that cryptocurrency met the four criteria for "property" in the UK case National Provincial Bank v Ainsworth [1965] AC 1175. In short, cryptocurrency is an intangible property: definable, identifiable by third parties, capable of being held by third parties, and possessing some degree of permanence or stability [see paragraphs 57 and 59 of the judgment]. This judgment confirms Hong Kong's alignment with other common law jurisdictions in recognizing cryptocurrency as a legitimate property. B. The Importance of the Terms and Conditions of Cryptocurrency Exchanges In determining whether a cryptocurrency exchange holds cryptocurrency on behalf of its clients as a trustee, the court considers the terms and conditions between the cryptocurrency exchange and its clients, as well as the exchange's operating practices. In the case of Re Gatecoin Limited, the court found that the latest version of Gatecoin's terms and conditions did not declare a trust relationship, and that the relevant terms stipulated that the cryptocurrency was not segregated. Therefore, the court ruled that Gatecoin held the cryptocurrency in its own name, rather than as a trustee on behalf of its clients. In the event of exchange liquidation, clients who accepted the latest terms would be considered unsecured creditors, and their "deposits" would be considered exchange assets used to pay liquidation costs.Interlocutory proprietary injunctions can be issued against cryptocurrency assets. In recent years, Hong Kong courts have issued interlocutory proprietary injunctions against cryptocurrency assets, such as: Nico Constantijn Antonius Samara v Stive Jean-Paul Dan[2021] HKCFI 1078[2] and Yan Yu Ying v Leung Wing Hei[2021] HKCFI 3160[3]. The relevant judgments confirm that Hong Kong courts can prohibit cryptocurrency holders from transferring cryptocurrency out of their wallets or otherwise disposing of cryptocurrency without the court's consent. D. Approval of tokenized injunctions In the case of Worldwide A-Plus Investments Ltd v A-Plus Meta Technology Ltd (HCA 2417/2024), the Court of First Instance of the High Court of Hong Kong approved for the first time a tokenized injunction served by blockchain technology, prohibiting the transfer of funds from cryptocurrency wallets involved in two Tether fraud cases involving more than HK$2.6 million. Tokenized injunctions break the limitations of traditional service methods and allow the service of court documents to anonymous virtual wallet holders. Once the injunction is tokenized, anyone intending to transact with the wallet in question will see the injunction stored on the blockchain, preventing anyone from using ignorance as a defense. E. Bank trust orders can be issued against cryptocurrency trading platforms. In the case of Wang Weiqing v Zhuo Yihao & Others[2025] HKCFI 4941[4], the court ruled that the plaintiff could invoke a bank trust order to compel the digital asset trading platform to provide relevant account information and transaction details, allowing the plaintiff to track its stolen assets. Although the court revoked the ownership injunction against the hot wallet in that case, it still allowed the plaintiff to invoke the bank trust order to request the exchange to provide relevant information. This reflects the Hong Kong courts following the practice of the British courts to assist victims in tracking digital assets. F. Summary and expected trends. The Hong Kong courts have made a series of landmark judgments, recognizing the property attributes of cryptocurrencies, using tokenized injunctions and bank trust orders, which greatly protects the rights and interests of investors. In June 2025, the Hong Kong government issued the "Hong Kong Digital Asset Development Policy Declaration 2.0", committed to building a trustworthy digital asset ecosystem. We anticipate more court proceedings and arbitration cases involving cryptocurrency asset disputes in the future, and the Hong Kong courts will continue to improve the legal system and apply it to the digital asset field.[1] The judgment can be found at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=151622&currpage=T [2] The reasoning for the judgment can be found 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] The judgment can be found at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=139582&currpage=T [4] The judgment can be found at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=173524&currpage=T [5] The Financial Services and the Treasury Bureau and the Hong Kong courts have issued their first injunction against tokenization, setting a precedent for handling legal matters in the virtual asset sector.
Hong Kong’s Legal Evolution: How Court Judgments Are Reshaping Digital Asset Rights
Hong Kong’s judicial system has taken a decisive step toward establishing itself as a global leader in digital asset legal frameworks, with a series of landmark judgments that fundamentally alter how cryptocurrencies are treated under common law. For sophisticated crypto investors, these developments represent both a maturation of the market and a paradigm shift in legal protection and enforcement mechanisms.
Recognition of Cryptocurrency as Property
The pivotal ruling in Re Gatecoin Limited [2023] HKCFI 914 confirms what practitioners have long argued: cryptocurrency meets all four criteria for legal property status. This decision aligns Hong Kong with New Zealand’s Ruscoe v Cryptopia ruling and other progressive jurisdictions. For investors, this recognition is foundational—it means digital assets can now be subject to trusts, used as collateral, and protected through proprietary injunctions.
This legal classification eliminates a significant barrier to institutional adoption. When a court unequivocally recognizes Bitcoin or Ethereum as property, it removes much of the regulatory uncertainty that has plagued traditional finance’s entry into the digital asset space. We expect this to precipitate a wave of new financial products and services targeting the Hong Kong market, potentially increasing liquidity and price discovery for major tokens.
Exchange Terms and Conditions: The Critical Legal Divide
The Gatecoin case reveals a stark reality: the contractual relationship between users and exchanges is paramount in determining asset rights during insolvency. The court’s finding that clients who accepted the latest terms would be considered unsecured creditors sends a clear message to investors: read the fine print.
This creates a bifurcated market. Exchanges with robust, trust-oriented terms will likely attract more sophisticated capital, while those with unfavorable clauses may face competitive disadvantage. For investors, this necessitates a more granular approach to exchange selection, treating terms and conditions as a material factor in investment decisions. We anticipate a consolidation in the exchange sector, with compliance-oriented platforms gaining market share.
The Revolutionary Impact of Tokenized Injunctions
The approval of tokenized injunctions in Worldwide A-Plus Investments Ltd v A-Plus Meta Technology Ltd represents nothing short of a legal revolution. By leveraging blockchain technology to serve court documents, Hong Kong has solved one of the most persistent challenges in crypto enforcement: reaching anonymous wallet holders.
This innovation creates powerful new possibilities for asset recovery. The immutable nature of blockchain ensures that anyone transacting with a sanctioned wallet cannot claim ignorance of the injunction—a game-changer for fraud recovery operations. For investors, this development significantly reduces the risk of irreversible loss from theft or fraud, potentially lowering the risk premium demanded by institutional investors.
Bank Trust Orders and Asset Recovery
The Wang Weiqing v Zhuo Yihao & Others case demonstrates the judiciary’s pragmatic approach to digital asset recovery. While the court revoked the ownership injunction against the hot wallet, it preserved the plaintiff’s ability to use bank trust orders to compel exchanges to provide transaction details—a practical solution that balances enforcement with operational realities.
This creates a dual-track enforcement system: proprietary rights for individual assets and information orders for tracking. For investors, this means enhanced protection against theft, particularly when assets pass through centralized exchanges. We expect this approach to be adopted by other jurisdictions seeking to balance enforcement capabilities with market functionality.
Market Implications and Investment Opportunities
These legal developments position Hong Kong as the jurisdiction of choice for digital asset litigation and dispute resolution. With the “Hong Kong Digital Asset Development Policy Declaration 2.0” signaling continued regulatory support, we anticipate a surge in crypto-related legal activity, creating opportunities for specialized legal services and blockchain-based compliance solutions.
For investors, the key takeaways are:
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Asset Classification: Crypto’s recognition as property fundamentally changes the risk calculus, potentially justifying lower discount rates for legitimate projects.
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Exchange Selection: Terms and conditions now represent a material risk factor, demanding more rigorous due diligence.
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Jurisdictional Arbitrage: Hong Kong’s progressive stance creates a competitive advantage for businesses and investors willing to establish operations there.
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Enforcement Evolution: The tokenized injunction represents a new frontier in legal technology, with potential applications extending beyond asset recovery to smart contract enforcement and regulatory compliance.
Risks and Considerations
Despite the positive developments, investors should remain cautious. The emphasis on contractual terms may create inconsistent outcomes depending on exchange policies. Additionally, the novel nature of these legal tools could lead to unpredictable enforcement outcomes in early cases.
Furthermore, Hong Kong’s approach may create tension with jurisdictions that maintain stricter regulatory stances, potentially complicating cross-border operations. As these legal frameworks evolve, investors must remain vigilant about regulatory divergence and its potential market impacts.
Conclusion
Hong Kong’s judicial evolution represents a maturation of the digital asset market, moving from speculative frontier to regulated financial instrument. For sophisticated investors, these developments provide both enhanced protection and new opportunities. The recognition of cryptocurrency as property, coupled with innovative enforcement mechanisms, creates a more stable and predictable environment for digital asset investment.
As the legal landscape continues to evolve, investors who understand and adapt to these changes will be best positioned to capitalize on the growing legitimacy and institutional adoption of digital assets.