HONG KONG SAR, CHINA Law and Practice Contributed by: Pang Lee, Joyce Wang, Mark Liang and Francis Li, Cooley
hashes of personal data on the immutable ledger while maintaining the actual substantive data in con- ventional, off-chain databases. This method preserves cryptographic data integrity and auditability while allowing for the deletion of the off-chain data when required. Furthermore, the Protection of Critical Infra- structures (Computer Systems) Ordinance (Chapter 653), which came into full statutory force on 1 January 2026, imposes mandatory cybersecurity governance, preventive technical safeguards and incident report- ing obligations on designated infrastructure operators utilising networked technologies, including blockchain infrastructure. 1.1.4 Smart Contracts Smart contracts are capable of being enforced in Hong Kong, provided they satisfy the fundamental tenets of traditional common law contract formation: offer, acceptance, valid consideration and the mutual intention to create legal relations. However, juris- prudence and regulatory guidance, including input from the technology committee of the Law Society of Hong Kong, indicate that smart contracts are fre- quently better characterised as automated execution mechanisms rather than comprehensive, standalone legal agreements. Smart code often lacks the linguis- tic nuance required to adequately capture complex representations, warranties, force majeure conditions and the full spectrum of equitable duties required in sophisticated commercial transactions. To ensure enforceability and mitigate operational legal risks, the HKMA’s second DLT White Paper (2017) and the March 2025 research paper both recommend that smart contracts be tethered to conventional legal scaffolding. Legal rights typically emerge from separate, legally binding master agreements or terms of service that govern the overarching relationship between the parties. Under the Electronic Transac- tions Ordinance (Chapter 553), electronic signatures and cryptographic authentications used to execute these contracts hold the exact same validity as tra- ditional wet-ink signatures, provided that the process is demonstrably reliable and the recipient consents to the digital format. Regulatory bodies strongly advocate for the inclu- sion of pre-established governance frameworks and
programmable “escape hatches” within the smart contract architecture. These predefined mechanisms allow for modifications, halts or reversals under highly stringent, multi-signature conditions to rectify pro- gramming errors or unforeseen eventualities without undermining the fundamental security and immutabil- ity of the network. 1.1.5 Industry and Trade Bodies As of the date of publication (11 June 2026), there are no statutory self-regulatory organisations (SROs) endowed with formal enforcement powers represent- ing the blockchain industry in Hong Kong. While pro- posals have been submitted by entities such as the Hong Kong Securities & Futures Professionals Asso- ciation to establish an independent SRO to handle frontline licensing and standard-setting, formal regu- latory and disciplinary authority remains exclusively vested in the SFC and the HKMA. However, the industry is robustly represented by high- ly influential trade associations and advocacy groups, most notably the Fintech Association of Hong Kong and the Bitcoin Association of Hong Kong. These organisations serve critical quasi-regulatory and developmental roles. They actively aggregate indus- try data, formulate consolidated responses to govern- ment consultation papers and promote best practices in areas ranging from smart contract auditing to AML compliance. They function as vital conduits between market participants and policymakers, ensuring that the legislative trajectory remains commercially viable and internationally competitive while facilitating eco- system networking, talent development and elevated professional standards. 1.2 Crypto-Assets 1.2.1 Property Considerations Crypto-assets are recognised as a form of property under Hong Kong law. This characterisation firmly aligns the jurisdiction’s jurisprudence with other major global common law centres. The landmark decision by the Court of First Instance in Re Gatecoin Limited ( in liquidation ) [2023] HKCFI 914 established that crypto- currencies fall within the legal definition of “property” and are therefore fully capable of forming the subject matter of a trust. This pivotal ruling facilitates the valid transfer, bequest and conformity of digital assets to
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