A Hong Kong court has recognized crypto as property "capable of being held on trust" in a case involving shuttered crypto exchange Gatecoin, according to a court document reviewed by CoinDesk.

Global law firm Hogan Lovells first reported on the judgment on Wednesday.

Justice Linda Chan, who presided over the case, said Hong Kong, in line with other common law jurisdictions, defines "property" broadly "intended to have a wide meaning."

There have been similar rulings in Mainland China, while the U.S. Internal Revenue Service treats crypto as property for tax purposes. A government-funded law commission in the U.K. found crypto can be classified as a new type of property under existing laws in England and Wales.

In 2019, Hong Kong-based crypto exchange Gatecoin announced it will shut down and start liquidation following an attempt to recover disputed funds from a former payment services provider.

Liquidators sought directions from the court on whether the crypto held by Gatecoin should be treated as property held on trust or "if no trust existed, the digital assets should be made available to the general body of creditors," according to the Hogan Lovells report. The exchange held up to 140 million Hong Kong dollars ($17.8 million) in crypto as of last October, the report said.

"While the court determined that cryptocurrencies are capable of forming the subject matter of a trust more generally, on the facts in this particular case it found that a trust had not been established," the report said.

The 2018 terms and conditions of the exchange platform showed "no certainty of intention to create a trust over the cryptocurrencies held by Gatecoin," the judgment said.

A ruling would give Hong Kong liquidators "greater clarity" on how crypto assets held by companies should be treated in wind-down procedures, Hogan Lovells said.

Hong Kong has been pushing for clearer regulations for the crypto sector. Brokerage firm Bernstein said earlier this year that Hong Kong's approach to regulating crypto could attract capital to the jurisdiction at a time of global regulatory uncertainty.

CoinDesk has reached out to Hogan Lovells for comment.

Update (April 20, 8:49 UTC): Adds detail from Hong Kong High Court judgment throughout.