Let’s talk about the “crypto wallet ban” of Hong Kong courts and the general trend of de-anonymization?

Understanding the King of Understanding is destined to mean the prosperity of the cryptocurrency market, and under the appearance of prosperity, there will be undercurrents. A few days ago, the Sajie team reviewed the judicial judgments related to cryptocurrencies that are more instructive or significant influential in the mainland in recent times. Today, the Sajie team turned its attention from the mainland to Hong Kong and talked about the recent cryptocurrency by the Hong Kong High Court. The judicial precedent set in the field of currency.

01. The Hong Kong High Court uses blockchain to continue issuing an

injunction to cryptocurrency wallets?

The injunction issued by the Hong Kong High Court at the end of last year is estimated that all old friends in the cryptocurrency circle have seen it.

The case itself is not complicated. The plaintiff W of the case is a private company established in Hong Kong in March 2015. The company's main business is marketing consulting. The company was defrauded of nearly USDT by telecom fraud in December last year. After realizing that it was cheated, the company's head immediately contacted the Hong Kong High Court through a lawyer and demanded that the two Tron wallet addresses hold the stolen money involved in the case be held. People issue injunctions to freeze assets in their wallets.

Just a few days later, Deputy Judge Douglas Lam of the Hong Kong High Court issued the asset freeze injunction as shown above and issued the injunction to the two wallet addresses involved through a technology company called M. The whole process is like flowing. Since all transaction details of cryptocurrencies will be recorded on the blockchain, if someone trades with the above two cryptocurrency wallets involved in the case, he will see the injunction recorded on the blockchain. This practice can be viewed in disguise It is a "inscribed" technology, which is like engraving the word "stolen money" in the cryptocurrency wallet involved in the case.

Under Hong Kong law, violating the injunction can be found guilty of contempt of court, sentenced to jail or fined. This injunction basically blocked the liquidity of cryptocurrencies in the two cryptocurrencies involved in the case, preventing the plaintiff from losing more.

02. Why is this very meaningful

Due to the anonymity of blockchain technology and cryptocurrency itself, it is extremely costly for law enforcement agencies to track the real person behind cryptocurrency wallets (extremely high costs do not mean that it is impossible. In fact, police in China, the United States and other countries have the ability to track it. The real person behind the cryptocurrency wallet is just that the cost of handling cases is disproportionate to the losses, so in small and micro-criminal cases involving currency, relevant technology and manpower will not be used for case handling costs).

In fact, in most civil currency-related disputes that occur in Hong Kong, the lost party even only knows the other party’s cryptocurrency wallet address and cannot know the other party’s identity. Prosecution will become extremely difficult and cannot be carried out through legal channels. Relief solution. The Hong Kong High Court approved the issuance of an injunction to two wallet addresses through blockchain technology, which directly solved the problem of "only knowing the wallet but not the real person" in currency-related disputes. It can also be seen from the content of the injunction. This time, the Hong Kong High Court directly wrote two wallet addresses in the "Defendant" column, which can be regarded as solving the litigation problem caused by the anonymity of cryptocurrencies.

03. Will cryptocurrencies no longer be "safe" in the future?

Recently, during a communication with his old friend, an old friend gave an exclamation: First, because the investment prospects of cryptocurrencies are really good, and second, they are attracted by the "anonymization" wallet. Make assets more "safe", and once you fall into legal litigation, you can at least "preserve" some property. In fact, there are many old friends who think this way. If "safety" is understood in this way - that is, it does not mean reducing the risk of stolen or damage, but allowing the holders of virtual currency to get rid of the "entanglement" of judicial organs as much as possible, then the Sajie team can say it directly - Yes, cryptocurrencies are no longer "safe".

This time, the Hong Kong High Court directly issued an injunction to the cryptocurrency wallet address through a technology company, which actually created a precedent around the world - even if the exchange or stablecoin issuer does not cooperate, Judicial authorities can still issue judicial orders directly to the wallet address to broadcast to all intents and wallet transactions involved in the case - if they dare to trade, they will be punished accordingly.

Since then, Hong Kong's judicial organs can not only issue injunctions to individuals or companies with clear identities in cryptocurrency disputes. Even anonymous wallets can do this. It has to be admitted that Hong Kong is already at the forefront of technology in issuing tokenization legal notices. It is believed that foreigners involved in cryptocurrency disputes in the future can also issue similar injunctions through Hong Kong's technology companies and law enforcement agencies to recover their losses. The space for such an idea to take advantage of the anonymity of cryptocurrencies to escape the control and sanctions of judicial authorities is getting smaller and smaller.

04. Written at the end

Finally, the Sa Jie team will take you to review the major judicial system in the cryptocurrency field in Hong Kong over the years and experience the steps taken by Hong Kong's judicial authorities to help Hong Kong become a cryptocurrency center.

Step 1: Determine that cryptocurrency constitutes "property". The most important milestone for Hong Kong judicial authorities to protect cryptocurrency is the Gatecoin case in early 2023. In this case, the Hong Kong Court of First Instance ruled for the first time that cryptocurrencies are "property" under the Hong Kong Law and can then be regulated by relevant laws that protect private property. The Gatecoin case provides legal certainty and demonstrates the judicial position of the Hong Kong court in China and other major common law jurisdictions (including the UK, the British Virgin Islands, Singapore, Australia, New Zealand, Canada and the United States) to cryptocurrencies. The judicial position regarded as "property" is consistent. This is the brightest move by Hong Kong's judicial authorities in recent years in the cryptocurrency field.

Step 2: The stablecoin bill is issued. Stablecoins are the bridge between traditional finance and blockchain technology. Hong Kong's stablecoin bill puts forward relatively complete compliance paths and compliance requirements for fiat-linked stablecoins, which directly guarantees the financial security of stablecoin holders and institutions. This step is a link between the traditional financial field of Hong Kong and the technology finance field of technology. An important step.

Step 3: Protect cryptocurrency assets through blockchain technology. This step is what is listed in this article. That is, according to the anonymity of the blockchain itself, the plaintiff does not force the plaintiff to know the defendant's true identity. As long as he has a wallet address, he can still send an injunction to the wallet address. This step can be said to be an important part of improving judicial protection. It is also a major change in the traditional judicial system in the field of financial technology, which directly breaks the problem that Hong Kong has not been able to know the identity of cryptocurrency fraudsters in the past and cannot follow legal means to provide relief.