When a cryptocurrency business collapses, recovering its assets may involve additional complicating factors beyond those otherwise encountered in an insolvency process concerning traditional asset classes. The company’s assets may be dispersed across digital wallets amongst different cryptocurrency exchanges, with key information existing only on the blockchain.
Matters become more challenging where assets, records and stakeholders are located across multiple jurisdictions, requiring liquidators to seek assistance beyond the company’s place of incorporation.
It was against this backdrop that the Court of First Instance in Re Tai Ping Shan Ltd (in official liquidation) [2026] HKCFI 4079 considered the extent to which Hong Kong’s common law recognition and assistance jurisdiction could be deployed in support of a Cayman Islands liquidation involving a cryptocurrency trading business.
Background
Tai Ping Shan Ltd (the Company) was incorporated in the Cayman Islands as an over-the-counter cryptocurrency trading business. The Company was established by two directors of Three Arrows Capital Ltd (3AC), a Singapore-based cryptocurrency hedge fund. Initially, much of the Company’s business was conducted for 3AC before it expanded its services to other clients.
After 3AC entered liquidation in June 2022, joint official liquidators (the JOLs) were appointed over the Company. In the course of the JOLs’ investigations, they found that the primary assets of the Company were digital assets (consisting of cryptocurrency tokens) and claims in the liquidation of 3AC and FTX Trading Ltd.
The JOLs encountered difficulties obtaining documents and information from third parties located in Hong Kong, including the former director and shareholder of the Company, who either refused to cooperate or provided information in a limited and piecemeal fashion. Against this background, the JOLs applied to the Grand Court of the Cayman Islands (the Cayman Court) to obtain a letter of request (the Letter of Request) asking the Hong Kong Court to recognise the JOLs and to provide assistance. The JOLs then applied to the Hong Kong Court of First Instance (the Court) for orders enabling them to collect and take control over the Company’s assets and obtain information and documents in Hong Kong.
The Court’s decision
The Court granted the relief sought and recognised the JOLs for the purpose of carrying out their functions in Hong Kong.
Amongst other things, the JOLs were authorised to obtain documents and information from founders, former employees and service providers based in Hong Kong. This included authority to obtain log-in credentials for company email accounts and other company books and records held in electronic form.
The Court considered the principles governing an application for recognition and assistance of officeholders appointed by a foreign court as established in Re USUM Investment Group Ltd [2026] HKCFI 13201.
Recognition
As set out in the Re USUM decision, the Court may recognise the appointment of a foreign insolvency officeholder where: (i) the proceedings are foreign collective insolvency proceedings; (ii) the foreign proceedings are conducted in the jurisdiction of the company’s place of incorporation or where its centre of main interests (COMI) is located; and (iii) there are no public policy, fraud or natural justice concerns which would bar recognition.
The Court considered that each requirement was satisfied. The Company had been in official liquidation in the Cayman Islands since 14 May 2025 under the supervision of the Cayman Court and the proceedings were plainly collective insolvency proceedings. Further, the liquidation had been commenced and conducted in the Cayman Islands (the Company’s place of incorporation) and the JOLs’ powers derived from the winding-up order made by the Cayman Court and the relevant provisions of the Cayman Companies Act. The Court was satisfied that no public policy concerns arose which might prevent recognition being granted.
Assistance
Following the principles in Re USUM, the Court considered it may grant assistance to a foreign insolvency officeholder where: (i) the appointment of the foreign insolvency officeholder is recognised under Hong Kong law; (ii) the power which the officeholder invites the Court to exercise or confer is of a nature which the Court has recognised at common law or which is proper for the Court to exercise having regard to the proper exercise of the judicial function; (iii) the order sought is one which can be made under the law by which they were appointed; (iv) the assistance is necessary for the administration of the foreign winding-up or the performance of the officeholder’s functions; and (v) the order sought is consistent with the substantive law and policy of the Hong Kong Court.
The Court was satisfied that these requirements were met. The appointment of the JOLs was recognised under Hong Kong law. The powers sought concerned the collection and preservation of assets and the obtaining of company information and records, categories of relief which have consistently been granted as part of the Court’s common law recognition and assistance jurisdiction. Upon considering the Letter of Request and counsel for the JOLs’ submissions as to Cayman law, the Court was satisfied that the order sought was one which could be made under Cayman law.
Emphasis was placed on the requirement of necessity. The Court accepted that persons located in Hong Kong who had previously managed or dealt with the Company’s affairs were likely to possess assets, books and records belonging to the Company. Access to those materials was necessary not only to advance the JOLs’ investigations but also, crucially, to obtain access to cryptocurrency trading platforms and wallets on which the Company’s digital assets were held or traded. The Court also considered the persistent lack of cooperation encountered by the JOLs from former management, service providers and employees, observing that the requested powers would effectively “give teeth” to the JOLs’ information requests and enable further applications to compel compliance if required. Finally, the Court concluded that the orders sought were consistent with the substantive law and policy of Hong Kong.
Having found each of the Re USUM requirements to be satisfied, the Court granted a broad suite of powers enabling the JOLs to obtain information and documents from the Hong-Kong-based founders, former employees and service providers, secure and control company assets, obtain books and records in electronic form, and gain access to company email accounts and other digital infrastructure necessary for the recovery and investigation of the Company’s assets.
Commentary
The decision illustrates how the established recognition and assistance principles in Re USUM may be applied where a company’s assets and records are located on the blockchain.
Effective control of a cryptocurrency business may depend as much on access to email accounts, exchange accounts and authentication credentials as it does on possession of traditional books and records. In practical terms, the ability to access those systems may determine whether liquidators are able to identify, preserve and recover assets.
Viewed in that light, the relief granted is noteworthy. The Court was prepared to authorise measures aimed at securing books, records and log-in credentials necessary to access platforms on which the Company’s digital assets were held or traded. The decision therefore offers useful guidance as to the assistance that may be available where assets and records are dispersed across digital platforms and held by parties located in different jurisdictions.
Acknowledgments to our summer interns Iris Hon and Venesse Chang for their assistance with this article.
For further information, please contact :
Richard Keady, Partner, Dentons
