Singapore’s High Court recently recognized cryptocurrency as a form of property that can be held in trust. This landmark decision came about in a case involving Bybit, a Seychelles-based exchange, and a contractor named Ho Kai Xin. Bybit filed a case against Ho, alleging that she violated her employment contract by misusing her position to transfer more than 4.2 million USDT (a stablecoin issued by Tether) to her own addresses. Ho also moved a substantial amount of fiat currency into her personal bank account.
The presiding judge, Philip Jeyaretnam, stated that, like any other asset, USDT can be the subject of a trust. The judge’s ruling referenced a public consultation response published by the Monetary Authority of Singapore on July 3, 2023. This response emphasized that it is indeed possible to identify and segregate digital assets, further supporting the notion that they can be held in trust.
Judge Jeyaretnam further explained that a holder of a cryptocurrency possesses an intangible property right that is recognized by common law, making it enforceable in court as a thing in action. He acknowledged that this conclusion might appear circular but noted that it aligns with how the law perceives other social constructs, such as money. Jeyaretnam illustrated his point by invoking the example of shells, beads, or paper notes, which gain value only through societal acceptance as a medium of exchange.
The judge emphasized that while some individuals may question the value of crypto assets, it is essential to remember that value does not inherently reside within an object itself. With this in mind, Bybit sought a declaration that Ho held both USDT and fiat currency on trust for the exchange. Ho, however, blamed her cousin Jason Teo for stealing the assets from Bybit without her knowledge, asserting that he solely owned and controlled the respective addresses.
After carefully considering the evidence, the judge concluded that there was no evidence to support Ho’s claims about Jason’s involvement. On the balance of probabilities, he accepted that Jason either did not exist or did not play the role described by Ho. As a result, the court ordered Ho to return the assets to Bybit.
This judgment marks a significant development in recognizing cryptocurrency as a legally recognized form of property that can be held in trust. The decision provides clarity in terms of the legal rights and responsibilities associated with digital assets, further solidifying Singapore’s position as a leading jurisdiction for cryptocurrency-related cases.
