The Pandemic Parallel: Bitcoin's Rise Amid Uncertainty
April 2020 marked a pivotal moment when Bitcoin's price surged past $10,000 despite COVID-19 economic anxieties. This event cemented cryptocurrencies' role as modern safe-haven assets alongside traditional gold investments.
Beyond financial correlations, Bitcoin and viruses share two striking similarities:
- Social undesirability (self-evident in public perception)
- Conceptual indeterminacy (philosophical debates mirror legal ambiguities)
Property Law Conundrum: Colonial Bank vs. Whinney
Common law traditionally recognizes only two property categories:
- Possessory property (physical assets)
- Choses in action (legally enforceable rights)
As established in Colonial Bank v Whinney [1885], Bitcoin defies both classifications:
- Not possessory (intangible, virtual nature prevents physical control)
- Not chose in action (lacks inherent legally enforceable rights)
(AA v Persons Unknown [2020] case highlighted this legal vacuum)
👉 How does Bitcoin taxation work in different jurisdictions?
UK Judicial Guidance: The 2019 Crypto-Asset Statement
Mr. Justice Bryan's ruling referenced key insights from the UK Judiciary Taskforce:
- Paragraph 77: Colonial Bank shouldn't limit property definitions—common law must adapt to new commercial realities
- Paragraph 83: Modern statutes expand property definitions beyond traditional categories (Theft Act 1968, Proceeds of Crime Act 2002, Fraud Act 2006)
- Patents Act 1977: Explicitly classifies patents as "personal property" (neither possessory nor choses in action)
Key Judicial Conclusion
"Cryptocurrencies might not be choses in action under narrow definitions, but this doesn't preclude their classification as property."
Hong Kong's Legal Landscape
While Hong Kong courts haven't directly addressed this issue:
- Theft Ordinance and Patents Ordinance mirror UK legislation
- AA v Persons Unknown carries strong persuasive value
- Courts pragmatically handle Bitcoin-related Mareva injunctions
Remaining uncertainties:
- Blockchain-detached utility tokens
- Asset-backed cryptocurrencies
- Securities law implications (Swiss Federal Council Report 14/12/2018 highlights regulatory gaps)
👉 What are the emerging trends in crypto regulation?
FAQs
Q: Is Bitcoin legally recognized as property in Hong Kong?
A: While no direct case exists, UK precedents and shared legal frameworks suggest probable recognition.
Q: Why can't cryptocurrencies fit traditional property categories?
A: Their virtual nature defies physical possession, while lacking inherent rights prevents classification as choses in action.
Q: What about non-Bitcoin cryptocurrencies?
A: Tokens with external asset linkages or utility functions may require securities law amendments for clear classification.
Q: How does this affect crypto investors?
A: Until legislative clarity emerges, certain tokens remain in legal limbo—consult professionals for asset-specific advice.