This is the first decision by the Hong Kong Court on whether clients of a crypto exchange have proprietary claims to cryptocurrencies held on the platform. It confirms that cryptocurrency constitutes property under Hong Kong law.

Key Points:

• Cryptocurrency constitutes property under Hong Kong law and can therefore form the subject matter of a trust.

• Whether cryptocurrencies stored on cryptocurrency exchanges are held on trust for their customers will depend on the construction of the contractual terms and conditions governing relationships between the cryptocurrency exchange platform and its customers. The court will also assess the operational reality of the exchange, including how assets are actually maintained and applied by the exchange.

• Crypto owners and users should ensure that they understand the effect of the terms and conditions of the cryptocurrency exchange and carefully scrutinise any proposed updates to such terms before accepting them.